Snowball Sanity Check

abovemymeans

Hi,
I'm trying to work out my debt free date using the snowball calendar. I've got a couple of questions about what i should put into it.

I've got an HSBC loan with a balance of £9220 to pay. The interest on this was calculated at the beginning so should i enter in 0%? (I pay £318 ish pm so have 29 payments left).

Secondly I've got a Natwest card with various rates on interest.
£2331 6.9%
£2033 20.89%
£650 22.47%

As i have no choice but to pay them off in this order i did a weighted average which came out at 14.59%. Is this the right thing to do?

Thanks in advance for any help.
AB

MustStopSpending

I've never really understood the snowball thing! Hopefully someone will be along soon to help!

[Deleted User]

If you have a good credit history then swap your CC to a 0% or life of balance.

If your loan isnt flexible then dont worry about it just let it run.

Once your sorted always pay off the highest interest rate.

Storm

Hi,

Quick answer - yes & yes I'd think!

If no more interest is going to be added then put the loan at 0% with the standard payment.

With the credit card, either use a weighted average like you suggested, or what I'd be tempted to do considering the aprs on the CC:

£2331 6.9%
£2033 20.89%
£650 22.47%

Is put it in as 2 CCs on the snowball - the lower apr one with a minimum monthly payment of your total-loan payment and bring the higher ones together as their not too different and put minimum payment as zero.

Hope that makes sense

nomoneytoday

MustStopSpending wrote: »

I've never really understood the snowball thing! Hopefully someone will be along soon to help!

In a nutshell it means pay of your most expensive debts first.

Say you owed £10,000 to bank A at 10% and £1,000 to bank B at 20% you would pay the minimum to bank A and try to clear bank B's debt first.

Emma's_Mum

Go to https://www.whatsthecost.com and put in your figures and it will work it all out for you.

abovemymeans

thanks guys, it's the tool at whatsthecost that i'm using.
Sadly i have a poor credit rating so haven't had any luck with other cards, i think this is more as i'm near the limits of my available credit rather than missed payments.
i'm trying to stagger applying for ards as i don't want to damage my rating any more.

Next step working out how much i can pay off each month:eek:

abovemymeans

On the credit note, does anyone know of any lending companies that only use call credit. my rating with them is quite high so might be a route to a cheaper CC/loan.
cheers