paying off old debts now my circumstances have changed

admiral208

Hi,

When I was a student I got into quite a bit of debt, when I left University I got a job that didn't pay very well and got into more debt. At its worst, I had 5 credit cards and about 16k of debt. I also had a few payday loans to get me through the months.

In the last 3 years I have managed get a much better job and I now have about 10k of debt on 2 credit cards and a 1.5k overdraft.

My problem is that in the last year, I am now earning enough to live without increasing my debts and I can afford to pay the minimum payments (Around £300 per month) but I the interest added every month is about £150. My credit rating is still very poor. this means that I cannot get a new card to balance transfer with a better rate.

Ultimately, I am paying the debt off, which I am pleased about but its so slowly because of the interest rates. I would rather be saving the 300 a month for a house deposit rather than paying interest. How can I get it paid off quicker? Do I have to wait until my credit rating gets better before I can get a better rate?

Any advise would be greatly appreciated.

thanks

homelovin

Hi

I'm not too good at this, but I didn't want to read and run.

It is excellent that you are paying the debts down and want to start saving, well done. It takes time to pay it all off and adjust, and the credit rating will also take time to improve. One thing I believe is that when you only pay the minimum every month, it doesn't look particularly good. Try and pay more off, even if it is a little. And aim to pay the most of the highest interest, and never ever ever miss a payment or be late! The best way to insure this is to set up a direct debit for a fixed amount each month. Make the fixed amount above the minimum payment, and try and send extra payments to the highest interest. Even a fiver here and a tenner there adds up, because the interest you pay will be going down at the same time.

Hope that helps, and keep going! One foot in front of the other and you will get to your journey's end.

EssexHebridean

Have you done the sums to work out and make sure you're paying things off in the right order to minimise the interest? If you've not already done so, do your SOA and post it on here so that people can suggest places you might be able to make savings. As for paying off quicker - it's the old fashioned routes that work best I'm afraid - eBay anything saleable, can you work extra hours or a second job for a short while to really hammer it down? Any savings you can make in day to day living obviously will make a difference.

If you've been turned down on applications for 0% already be careful before applying again - use Martin's checker on here to ascertain whether you're likely to be accepted rather than going through the application process again - it's no guarantee but is at least an indicator.

Look at it this way - the amount you owe is decreasing a lot faster now than it was, isn't it!