New Life Pending.....

PurpleUnicorn

Well done on the loan payment.

Iwantanewlife

URGENT HELP NEEDED PLEASE!

I was just re doing my budget for next month, checking minimum payments etc, and clicked to see that ive received a credit increase on CC1 - this has opened up an extra £750, shall i order a new card and pay off the loan with this as this credit card is only 31%, but this will then be maxed out??

probably a stupid question as it makes complete sense, i just need to make sure that im not going to do something else stupid lol!

Iwantanewlife

Update

Just checked and i cant pay it off with a credit card, annoying! As the other two CC are all the same APR's is it worth doing anything with the £700 increase?

Iwantanewlife

Another update.....

If i withdraw the £700 on my credit card I will get charged 3% (£21) I could then put in my bank account and pay off the loan that way.... better option than the daily 89% APR?

enthusiasticsaver

If the loan was to take over a year I would say yes it may be worth taking out a cash advance but if you are able to repay it quicker then doing the maths is needed given the card is 31% so not a great rate and 3% cash advance charge. That 89% is over a year not daily so you need to work out the daily rate and whether it is worth paying £21. Personally if you are paying £500 off the loan by the end of the week taking the loan down to £600 approx. then I would not say it is worth it.

enthusiasticsaver

So assuming the loan is down to £643 after the £500 repayment that means a daily interest charge of £1.56. The daily rate on the credit card will be about 55p so it saves you around £1 a day in interest once you have repaid the £21 cash advance fee. So after 21 days it would make it worth it. Depends on how long it will take you to get rid of the loan without using the cash advance.

Iwantanewlife

Hi Guys sorry your right, the daily interest for the loan is 0.18%. In reality and with Christmas coming i think it will still take me a good 3/4 months to clear the loan just going with how i am.

[Deleted User]

I would say go for it and repay the loan in full. With the numbers enthusiasticsaver gave, if it's going to take a few months, you'll save yourself a few quid in interest. I found it really good for my mental health to have fewer individual debts as well, it's just less overhead to manage in your head.

However, the interest rate on that credit card is still atrocious, so you'll still need to be focused on getting that down as quickly as you can.

Great news on the easyJet money though - I'd gladly have 24 hours of hassle if someone gave me £700 for my troubles haha! And well done being disciplined enough to put your windfall to the best possible use - keep doing what you're doing and you'll be turning your situation around really quickly!

Iwantanewlife

Moguline wrote: »

I would say go for it and repay the loan in full. With the numbers enthusiasticsaver gave, if it's going to take a few months, you'll save yourself a few quid in interest. I found it really good for my mental health to have fewer individual debts as well, it's just less overhead to manage in your head.

However, the interest rate on that credit card is still atrocious, so you'll still need to be focused on getting that down as quickly as you can.

Great news on the easyJet money though - I'd gladly have 24 hours of hassle if someone gave me £700 for my troubles haha! And well done being disciplined enough to put your windfall to the best possible use - keep doing what you're doing and you'll be turning your situation around really quickly!

Thank you so much for your reply, I know i have to say i thought it was a real stroke of luck as i was off work the next day anyway so really made no difference to me!

Im hoping now lenders will see I am taking money management seriously, my credit file will start to reflect the work and i will be able to get better deals as i pay down the remaining credit cards. :j

Iwantanewlife

enthusiasticsaver wrote: »

So assuming the loan is down to £643 after the £500 repayment that means a daily interest charge of £1.56. The daily rate on the credit card will be about 55p so it saves you around £1 a day in interest once you have repaid the £21 cash advance fee. So after 21 days it would make it worth it. Depends on how long it will take you to get rid of the loan without using the cash advance.

Thank you, as always, for your really helpful comments! this is all such a massive learning curve for me your help is invaluable!