Povident personal credit - multiple loans

gemmajenkins0208

Hi.

Myself and my mum, dad, brother and my partner all have loans from Provident. To cut a long story short we have fallen on hard times and are now paying them off but we are all on waivers - paying it back in tiny sums of £5 a week, £8 a week per loan etc.

Even so, we are really struggling to pay them all. I have had a pay rise at work and I am hoping to be put on a better contract with more hours at the end of May.

What I want to know is this - I would like to help us all and completely pay off one of the smallest loans with the least amount owed on it, but I am unsure if this is the best way to go about getting ourselves debt free. I have received mixed information about paying off the bigger ones first, paying off the smallest ones first, paying off the ones with the highest interest rates first etc. etc.

I'm pretty sure I know which loan is the smallest, my partner took out a £200 one about a year ago so his should only have about £100 max owing on it now.

Please no comments saying 'why can't people pay off their own?' etc. it's a long story!

[Deleted User]

You should pay off the one with the highest interest rate.

gemmajenkins0208

Ok thank you.

I'm not certain on what the rates are but I will talk to mum as she has all the books so I'll look through them and see what's what and go from there.

glennstar

What sort of loans from Provident? They do a lot of differing products.

It is door step? If it is, have you spoken to your Rep? They are often very helpful. They will talk you through your options, tell you what's outstanding, how much it is costing you and give you a steer as to how best to approach things given your change in circumstances.

gemmajenkins0208

Yes it is doorstep loans, and we have spoken to our rep and she agreed the best course of action was for us to be put on waivers.

I really want to help by starting to completely pay off the smallest loans but will they penalise me for it? I asked my parents about it and they said if I did do that then I wouldn't have to pay them rent for that month as I'm effectively paying some of their bills for them. Paying off loans in thus way also frees up money to pay more off the others so then they get paid off quicker.

carolwat

Sounds to me like your family have all taken out loans for you and now you want to pay them off. Interest is added when you initially take the loans and nothing more will be added no matter how long you take to pay them back. If your on a waiver im assuming all the loans are overdue, if thats the case then it makes no difference in what order you pay them off. If you have any that are still within their original term then depending on how long they have left you may be due a rebate so would benefit by paying those off early.

gemmajenkins0208

No the loans weren't taken out for me carolwat - I had never even considered taking out a loan until my mum came to me and asked me to take one out in my name for her as she needed the money but couldn't take out any more.

Thanks for the advice, the bit where you said about the interest being added when I take out the loan does sound familiar actually.

Hmm ok, I'll sit with mum when we're both free and go through it all

Tiddlywinks

If you're really serious about reducing your debt then you need to cut all unnecessary spending... like brow and manicure treatments on payday.

Oh, and going out and getting drunk costs money too so you might want to try staying in more.

gemmajenkins0208

You make a good point Tiddlywinks.

Got my nails and brows done last week which will see me through for a christening I'm attending soon then I think I'll have to leave it until I know I can afford it again without jeopardising anything else...

AnotherJoe

Whilst it is usually recommended to pay off the highest interest rate first, there are some that make the point that a lot of paying it off is psychology (Otehrwise how did you get into this mess in the first place), and if you pay off the smaller loans first then at least you see the number of loans dropping and it seems better to you and that makes you more incented to clear the rest.

Otherwise, so this POV goes, after some time of paying off the largest loan, its still there and so are all the others and you dont seem to be making progress so you give up.

The key thing to focus on is, once you've paid one off (and if there's a small one you can clear I say do it) then put the payments you were making towards that to the next smallest, which will speed up its clearing, and so on.

Financially as I say this isn't the quickest way but if it helps you stay the course that might be better than giving up after 6 months.

gemmajenkins0208

I like your thinking AnotherJoe.

That is exactly what I'll be doing. I fell they will clear quicker if we do it that way

On my next payday i will be asking mum what the smallest one is and how much is left on it and get her to put me on the phone to them(i don't know the number) and pay it off