Years to clear my loan!!!

Swindled666

Hi, I am a newbie and just wondered whether anyone could provide some advice about getting debt free in a shorter period?
I took out a Northern Rock loan for £20k to run for 10 yrs from Dec 2005 at 6.9% = £27,500 to pay back :mad: I have a credit card with £700 on (which will be cleared when I get my bank charges back) and a £1500.00 O/D on a Grad account.
I am just fed up as I really want to get on the property ladder in the not so distant future but there is no way I could afford a morgage + this loan. My plan is to,

1. Clear this card (bank charges already filed and waiting for £701.00)
2. Start to chip away each month on O/D say £100.00 per month.
3. Then next year start paying an extra £150.00 on top of the £229.00 for the NR loan. But this will still take about 7 yrs to clear.

Regarding NR loan, does the interest fall if I pay off more per month or is it fixed? It's unsecured. If I knew that in say 4 yrs I was debt free then that would be a brilliant goal. I am 38 now and don't want to be getting a morgage when I am 48....

Any help or guidence woulf be really appreciated. Cheers. :T

jonesMUFCforever

I'm not taking the mick but do you not have any useless clutter in your loft or garage which you could sell off to repay some of the debts?

The fact that you have claimed £701 in bank charges suggests that in the past you have not been very good at dealing with money - is this now a thing of the past? Have you made a SOA detailing every penny in and out every month to see if you could make further savings to put towards your loan.

I would advise you not to think about getting a mortgage at present until that loan is repaid.

N79

I would suggest you go to the debt free board and post your SOA (see the instructions in the sticky board) there. Plenty of people will be able to suggest ways to pay off the loan in the shortest time.

N79

AMILLIONDOLLARS

This was taken from the info I received this morning.

Can you make overpayments to your loan?
Yes you can make overpayments at any time. Your monthly payment will not reduce and the total amount of interest paid will remain the same unless you settle your loan in full. As overpayments reduce your outstanding balance, you may be able to pay off the loan early you may be able to pay the loan offer earlier than expected, as your loan term will reduce in line with any overpayments made. If you do pay off the loan early you may be entitled to a rebate of interest, which is calculated using the formulae as detailed in the Consumer Credit Act 1974.

Hope this answers your question.

AMD