Lunars Debt Free Journy!!!

lunar

thanks chocaholic, i will take your DD advice and keep imagining it will happen this time. in the past i have always tried not to get my hopes up so that i wont be as disapointed if it doesnt work. it really doesnt work, im always a mess when it doesnt happen so im going to be positive, this is my month. the positive vibes from two pregnant women has to be a great start.

On the money front i had a bit of a brain wave last night and im not sure if i have done the right thing. I was checking my egg balance last night and saw there advert for flexible loans. I know its not advised to apply for loans on here but the egg credit card is charging me 22% and the loan is for 9.9% i can make overpayments, and there is no penalty for paying it off early. I have asked for the exact amount it would cost to pay off the credit card and would close the card straight away. Egg are calling me back between 10 and 11 today.

Following this my OH said why doesnt he try get a loan to pay the barclay card mint card and overdraft. he rang his bank and was accecpted straight away for a flexible loan for £5200 which will cover all 3 of these, he just has to take in proof of earnings to the bank on monday. the interest rate on this will be 12% I know that the interest rates are still high enough but mint and barclay card are charging me 25% and neither of us can get new credit cards. i can overpay on this loan too.

So while i wait for egg to ring, have i done the right thing? i just really hate the amount of interest im having to pay on these credit cards.

lunar

OK I have been called back by egg and they have offered me the loan. i couldnt get the 9.9% interest rate, they have offered me 14.1% and it was on the condition that my egg card was closed automatically by them. they have sent me the terms and conditions through and in the first year i will pay egg £450 less in interest than i would if i keep the credit card so i have taken the plunge and signed the online agreement.

Hopefully i have done the right thing. the agreement is over 48 months, but i can overpay with no penalty. my payments also go up. I was paying about £200 a month on the egg credit card, and im paying £253 to the loan. I have looked at my money and im able to afford the extra payments. The balance of egg is £9200 and that is what i have taken the loan out for. Its such a relief to finally be getting somewhere with reducing my interest amounts.

lunar

I have worked out my snowball date, and it reduces my DFD to march 2011! not much i know but every month counts. I really need to get earning extra money now to reduce it further. i desperatly want to be debt free before im 30 which is july 2010.

ZTD

Will the overpayments save you interest - i.e. it's not a front-loaded loan?

lunar

I have to pay slighty more in the first yeat than the last, i worked out that i will be paying £300 more in interest the first year than the last, but even then there is still a massive improvment from what i am paying now on the egg credit card. Its more than £400 difference, so i still thought it was worth doing.

lunar

ZTD wrote: »

Will the overpayments save you interest - i.e. it's not a front-loaded loan?

I think i miss read your question, they said the interest will reduce if i make overpayments and if i ring for a settlement figure it will only cost me the cash amount that i owe, without the interest that i would pay if the loan ran to the full term.

ZTD

That's good then.

It's just some loans are "front-loaded" which means they add all the interest in at the start, so if you do pay it off early, you still pay the same amount of money, but just over a shorter time.

Hence the question.

chevalier

So does this mean that you will be able to cut up all the credit cards (except debit ones) and live within your budget? That must be a great feeling even if you are not debt free yet. And a bit scary if you don't have the option of 'just putting it on a credit card'

good luck with this and the other
chev

lunar

I think i may end up facing the front loaded loan when i look into my origional loan from alliance and lester, im not checking yet as it is a long time before i would be able to over pay on it, ill prob check it out in a year from now.

lunar

chevalier wrote: »

So does this mean that you will be able to cut up all the credit cards (except debit ones) and live within your budget? That must be a great feeling even if you are not debt free yet. And a bit scary if you don't have the option of 'just putting it on a credit card'

good luck with this and the other
chev

I will still have the nat west card open as that one is on 0% for 11 more months. i havnt used any of my credit cards since my LBM in august but i will be closing them once all this goes through. Even with the overpayments i have been making the interest i have been paying has meant i havnt seen a huge difference in the debt.

I do feel this is a really good step, i thought there was no way out when i was unable to get any 0% credit to transfer my balances onto, im thrilled that ive been able to do this and save so much in interest payments.