Able to pay £500 a month towards £8000 debt, but...

matilda.cs

Hi all,

This ain't really a question, or anything...just a moan.

I currently owe £8000 (to next, cap 1, vanquis, lloyds, Barclays and aqua. (Yes....I know)

For the past 2 months I've paid £540 towards my debts (and am now in a position to maintain those payments) but due to the stupid rate of interest I'll pay around £4k on top!!

I know there's not much I can do (other than make payments and look for a 0% card in 6 - 12 months...) but it's so annoying.

From a lenders POV I've been using a lot of revolving credit, but IMO now I'm much more stable.

I know I'm the one to blame for getting into debt, but at the time it was a good solution to our financial problems. Now we're able to make proper repayments, it's just annoying that I can't get a better rate.

Like Lily said... Well it's very funny cos I got your f-ing money,
And I'm never gonna get it just because of my bad credit...

Oh well

Whiner

Plenty of other people in your situation.

Plenty of other people in far worse situations.

Tiglath

Prioritise the debt with the highest interest rate, get that paid off and move on to the next. It'll take time but you'll get there.

CKhalvashi

Tiglath wrote: »

Prioritise the debt with the highest interest rate, get that paid off and move on to the next. It'll take time but you'll get there.

This advice, paired with minimising your existing outgoings as much as possible.

Remember, that a 4 person takeaway with extras can easily be £30, whereas if you were to keep couple of pizzas in the freezer and serve this with chips and maybe chicken leg, the cost can go down to a fiver; £25 off the debt in exchange for 5 minutes in the kitchen.

I'd advise trying Martin's supermarket challenge also, looking at gas/elec suppliers, trying to get cashback on EVERYTHING etc etc etc.

Good luck!

CK

PeacefulWaters

What rates are you actually paying on each debt?

List them alongside the minimum payments.

Then pay all the minimum payments plus £1. Then throw the balance of your £540 at the debt with the highest rate.

Do this and unless you've got some payday loan type rates your debts will all be gone long before Christmas 2015 and you'll pay a lot less than £4k in interest before you're debt free.

matilda.cs

Thanks all, I'm an avid MSE user, and I know all the tricks!
My minimum payments are under £400 and with the mrs on maternity leave and 4 kids...£500 is the max we can afford to pay to bills.
We're living on £480 a month after all debts and normal bills, so it's too tight to pay more off!
And Peaceful - my two largest debts £3250 and £3000 are both at the highest apr (39.9 and 30% respectively) the rest are ok.
I will have paid off two very small debts by next month, so my "snowball" will start to really take off.
I know our position could be worse, it's just annoying!

poppasmurf_bewdley

You have debts of £8k and can afford to pay that debt off at £500 a month.

Not bad when you compare to those with a debt of £80k who can only afford to pay back at £50 a month! And we've seen plenty of those.

Thrugelmir

As you owe less then you'll be able to obtain lower rates of interest.
So target the most expensive account first. Clear it and close it.

At the moment you represent a high risk of default so the interest rates on offer will reflect this.

Bunker down for a few months. That'll speed up the process.

fozmcfc

Stick with it matilda.

During my days of bad debt, I spent 6 months paying off £1000 + a month towards my debt.

As soon as I got paid, I overpaid everything and lived a really frugal life.

The most important things in life, is having a roof over your head, with essential bills being paid and enough to eat, nothing else such as the gadgets, latest fashion and holidays matter.

You also sound like you have a big family to keep you busy, so just enjoy time with them, it doesn't need to cost a lot to have fun either.

Make a pledge for the next 12 months, to just clear the debt and you'll be nearly home and dry.

matilda.cs

Thanks all,
I know my position isn't that bad, but in a way that makes it worse for me. If I had £80k debt and could only pay £50 a month I would understand being refused better rates of finance. (Though I would be going BR in a heartbeat, but that's a different discussion)
I am front loading the higher apr loans.
I'm reluctant to close accounts once paid as this could have a negative affect, as my debt will then be at 100% of my available credit.
If I keep my cards open, I can keep my debt to below, say, 60% of my available credit which will look healthier.
Swings and roundabouts in a way, I guess, but as I won't be getting a loan for at least 6 months I can decide then

Thrugelmir

matilda.cs wrote: »

I'm reluctant to close accounts once paid as this could have a negative affect, as my debt will then be at 100% of my available credit.

Closed and settled accounts have no long term negative impact.

Only retain the accounts you actually need day to day.