Im new and want to be debt free

razra · 17 March 2007 at 4:52PM

well ok I have been reading the boards for a few months now and decided today that I really should register!LOL

So far with the advice from this forums I have managed to clear two of my three debts

they were

£4031 b and q store card ( bought a house that needs lots of work!LOL)
£400 new bed bought on finance

That leaves me with just the one debt of £5400 which was for new windows and doors so at least the wind cant get in now

So fingers crossed I can be debt free in 3 years by paying £200 (Which is an overpayment as Im only supposed to pay back £91 a month over 10 years! I dont think so!) a month of this debt if I stick with the current company but they charge a shocking 22% interest rate:eek: however when I rang up for a resettlement figure they then added on almost £150 with penalty payments to end my contract so looks like Im stuck with them:mad:

So would I be better to pay the extra and then take out a loan with someone else to clear it down in 3 years? or just stick with these guys and avoid the penalty charges?

Thanks

Hippychick · 17 March 2007 at 5:02PM

Congrats on clearing two debts already.

Personally I would try and switch loan providers 22% apr is very high and if you get a much reduced apr even with the penalty you will be better off in the long run. By switching you could even bring that debt free date much further forward than three years time, especially if you can overpay each month.

Have a nose around the loans board to see what is out there, there is no harm in looking even if you do decide not to switch!

sweetmoneysaver · 17 March 2007 at 5:04PM

Welcome!!!

sweetmoneysaver · 17 March 2007 at 5:07PM

Taking into account the exit fees it may still be better in the long run to leave and get a much lower rate of interest, say about 7%? The savings over the 3 years should clear this and give you lower payments. You could look into adding the extra interest on to a new loan. Check out Martin's articles on loans on the main forum. Just make sure it is an unsecured loan rather than a secured one!

Bambywamby · 17 March 2007 at 9:12PM

Welcome to the board :j

Well done clearing your other two debts. :T

Good luck with that last slippery little debt...you will soon have it licked.
X X

razra · 17 March 2007 at 9:24PM

thanks guys

Ive been checking out loans this afternoon and it looks like I could get a loan that would cost me around £169 a month and would take 3 years to clear that debt so Id save a bit each month

Going to try and ring up tomorrow and see if I can get a loan, so think if I can I will try and pay the huge interest rate one off and take a cheaper deal
If they say no I guess Im no worse off than I am at the moment

Thanks for your words, im so chuffed to have cleared two just really want the last one gone!! Then I can start some savings

smilealot · 17 March 2007 at 9:41PM

Welcome razra :hello:

smilealot

aah · 17 March 2007 at 10:58PM

welcome. good luck with clearing that last debt, a lower interest rate should help. Just add up all the quoted charges and decide.

Well done for clearing your other debts.

razra · 23 March 2007 at 2:12PM

Hi everyo ne and thanks for your hellos

A quick update I have just applied for a loan with masterloan so fingers crossed they will say yes ( I applied online and have to wait and see if I get a form to sign, sigh why they couldnt say yes or no I dont know) and i can get a loan over 3 years of £152 so thats only £52 more than my min payments on my 22% loan so heres to being debt free soon

On another note though I have checked my credit report and the two debts that I have paid off are still showing as outstanding debts although obviously they are showing that I have paid all my monthly bills. I have rung both companies and they assure me the balance is settled. How long will it take to show on my credit report? I did ask them but they said its cleared so it will show as such soon

Thanks