Cost of Debt - Help

kevsephton82

Hello,


Firstly, apologise if this is not the correct place to post this request. I have had a look around the site for information that may help me but have not been able to find what I am looking for.


I'm looking for help, tips and support on the best way to reduce the cost of my debt as I look to become debt-free. I don't have a problem affording my debt, just looking to optimise my repayment strategy to pay off as quick as I can and as cheaply as I can.


Thanks in advance.


Kev

easterbunni

If you can, move your debt to lower or 0% interest rates, remembering not to then incur more debt because it costs you less, or you have an empty credit card. Keep paying as much as possible.

MallyGirl

also - pay more to the debt with the highest interest, then once that is gone move focus to the new highest interest

ReadingTim

Whilst mathematically, taking a cheaper new loan to repay a more expensive old loan makes sense, many people spend both the new loan and the old loan, so end up doubling their debt, rather than reducing it. Only you know if you have the self-discipline to do this, but many don't, so find it simpler to avoid temptation than unsuccessfully try and resist it.

A easier solution is to simply spend less than you earn.

Willing2Learn

Hi Kev and welcome to the forum

What debts do you have?
What are their APRs?
What are the credit limit(s) for your credit card(s)?

kevsephton82

Willing2Learn wrote: »

Hi Kev and welcome to the forum

What debts do you have?
What are their APRs?
What are the credit limit(s) for your credit card(s)?

Thanks for the welcome.


Me and my partner have the following debts:

• Lloyds Credit Card - £4511 @ 21.69% APR (£4800 Limit)
• Post Office Card - £2813 @ 20.8% APR (£3900 Limit)
• Tesco Credit Card - £4134 @ 18.9% APR (£4400 Limit)
• Halifax Credit Card - £3772 @ 18.7% APR (£7700 Limit)
• Barclaycard - £14979 @ 12.83% APR (£15000 Limit)
• Zopa Loan - £2546 @ 11.9% APR (Final payment Jan 2019)
• MBNA Card - £8788 @ 0% APR currently (£9800 Limit)
• Lloyds Credit Card - £1049 @ 0% APR currently (£1100 Limit)
• Sainsburys Credit Card - £2850 @ 0% APR currently (£3000 Limit)

Cheers
Kev

D_M_E

The loan only has 4, possibly 5 payments left to clear so my strategy would be to continue making the payments to that.

Meanwhile, pay only the min payments to all cards except the Lloyds one and put every spare penny to clearing that then when that's cleared move on to the next and so on in the order you have listed them - when each one is cleared there will/should be more to put towards the next, particularly when the loan is cleared.

That's what I would do.

Willing2Learn

And then snowball those cards...You could also apply for a balance transfer cards, but seeing how close to the limits you are, you mail fail credit checks on affordability. Maybe try in 9 months once the snowball is in full swing!!

https://debtcamel.co.uk/debt-options/guide-to-snowballing/

kevsephton82

Thank you all. Strategy is clearer now!


Kev

sonuenjoys

To seek assistance on Barclaycard debt, you can approach Barclaycard directly for :

1. Minimum payment reduction through collections team (affects your credit file once on a payment plan)

2. Interest reduction through Superserver team (doesnt affect credit file) but your account should have an offer. This team will check for an offer if your account is not closed or suspended.

Thanks