Reducing debt slowly - any tips to speed it up?

vickibry

Hi

This is my first post here although have spent lots of time reading and lurking.

Basically, my husband and I got ourselves into a lot of debt about 6-7 years ago when he lost his job. Before then, our debt had been managable but after that point we ended up doing the worst possibly thing and using credit to pay debts and obviously ended up in a mess.

4 years ago we were in about £65000 unsecured debt. We are both in a better position work-wise now (we have our own business) and the current debt stands at about £38000. So, still a heck of a lot but obviously a lot better than 4 years ago.

The debt (and paying it back) has not been without a lot of sacrificies - mainly the fact that I have to work whilst my two daughters are young (if we hadn't had the debt, I wouldn't have to work).

Anyway. Two of the biggest debts are credit cards with Lloyds TSB. Mine is at £9100 currently and my husbands at £9,5000. The interest rate on both of them is about 18%, and the monthly interest is about £125 on each of them. We are currently putting all over-payments towards mine at the moment to try to clear that one, we are currently paying about £600 per month towards mine.

Now, is there any way to reduce the interest we are paying? We are unable to take out another credit card / loan as our credit history is not great.

Any ideas would be appreciated.

Thank you



Vicki

HappyMJ

Not really as you can afford to pay it. Just put every penny you possibly can towards the highest interest rates and the debt will be gone quickly. You can always try speaking with the credit card companies to reduce the interest rate but as you are not struggling I doubt they will reduce the interest charged.

vickibry

HappyMJ wrote: »

Not really as you can afford to pay it. Just put every penny you possibly can towards the highest interest rates and the debt will be gone quickly. You can always try speaking with the credit card companies to reduce the interest rate but as you are not struggling I doubt they will reduce the interest charged.

Depends what you call struggling. No, we aren't in a position where we cannot feed ourselves but I am currently working 60 hour weeks in our business - if we weren't paying such high amounts then we could take someone on part time in the business, if this makes sense.

We also have no luxuries, no holidays, no new clothes etc, just putting everything and anything we can towards clearing these nasty debts.


Vicki

allybee101

You're doing a great job and have already cleared so much debt, well done!

You might find it useful to try these snowball calculators. They can help you work out the fastest way to clear your debts.

They generally recommend attacking the debt with the highest interest rate first (as you're paying more interest on it) whilst paying the minimum repayment or a little above on the other debts. Once that's gone you focus on the next highest interest rate.
http://www.makesenseofcards.com/snowcalc.html
http://www.whatsthecost.com/snowball.aspx

Have you done a statement of affairs recently to check if there's any adjustments you can make to skim off a few more pounds towards the credit cards (utilities, insurance - have you got the best deals etc) ?