Motivate me...

redsquirrel80

I'm currently paying back about £12000 of debt (loan, two credit cards and a couple of other things) - about half is with DCAs and the rest still with the original companies. All have frozen interest and agreed to stop adding charges. At the amounts I'm paying at the moment it works out that I'll have paid them all off in about six years. The trouble is that I could probably pay a bit more towards them and clear them sooner by cutting back on other things but at the moment I can't really see what benefit that'll have.

I've no intention of trying to take out more credit after they're cleared, and even if I'm ever in the position to afford a mortgage (which seems unlikely at the moment) I'm still going to have a bad credit record. If by some miracle I ever earn enough to buy a house, will it make a difference how long ago my debts were cleared or will I still have to go for an extortionate 'bad credit' mortgage? And can anyone give me any other good reasons to motivate me to pay it off faster?

Fed Up Friday Squirrel :rolleyes:

chevalier

Have a look at https://www.whatsthecost.co.uk This has a snowball calculator in it that shows you your debt free date now. Then you can put in overpayments and see how much sooner your debt free date is.

Yes your bad credit score will stay with you for a while. So the quicker you get the debt is paid off the quicker these debts will show as settled on your credit report, which improves your credit score.
chev

blackangeluk

The quicker you pay them off, the quicker they can disappear off your credit rating (is it 6 years after settlement??), so I would say yes, pay them off. Just my opinion though.

Storm

Stuff stays on your credit history for 6 years, yes, so if you pay it all off a year earlier then it gives you an extra year for which you'll get better mortgage deals.

The other way to look at at, is to think about how much sooner you'll have all this lovely cash each month that you won't know what to do with - depends on what motivates you more.

One recommendation though, rather than paying a little more off each month, you may be better saving it instead until you can offer a full & final settlement to one or other of the creditors as you could get a better deal - also having a small amount saved up for emergencies is always a good idea!

rayday2

You can get mortgages with defaults on history but you have to pay I am paying about 8.1% which is pretty steep but I know others pay even more.

I feel a bit like you I could probably pay a little more but I think well I will keep that mortgage and stop myself from adding extra to it when I refinance. And also I think I never want a card again - so I guess I am the least qualified person to help lol!

sammy115

The problem is with overpaying when you are in an arrangement is that the company can then decide that you can afford to pay minimum payments again and cancel the arrangement. Therefore cancelling what is in effect interest free credit. Rather than overpaying each one could you save the money somewhere not easily obtainable (ISA perhaps) and then ring the creditors and ask them if you can make full and final settlements.

Worth a try perhaps!

redsquirrel80

sammy115 wrote: »

The problem is with overpaying when you are in an arrangement is that the company can then decide that you can afford to pay minimum payments again and cancel the arrangement. Therefore cancelling what is in effect interest free credit. Rather than overpaying each one could you save the money somewhere not easily obtainable (ISA perhaps) and then ring the creditors and ask them if you can make full and final settlements.

Worth a try perhaps!

Thanks to everyone for the advice, I think I'm going to carry on with the payments as they are and put whatever I have left at the end of each month into my savings account (there's not usually much of that but am trying to be more careful!), so can hopefully offer settlements for a couple of the smaller debts by the end of this year - fingers crossed!

hypno06

good luck, and keep posting x

Bestthingsinlifearefree

redsquirrel80 wrote: »

And can anyone give me any other good reasons to motivate me to pay it off faster?

:rolleyes:

I feel a bit lazy today, could you motivate me to motivate you?;)

redsquirrel80

Bestthingsinlifearefree wrote: »

I feel a bit lazy today, could you motivate me to motivate you?;)

I'm not sure, feeling a bit lazy too.. can you motivate me to motivate you to motivate me....?

immoral_angeluk

How about a bit of MR motivator?