I'm half way!

Mimi_Arc_en_ciel

Updating my signature settings this morning and I'm now half way in paying my debts off! 

Original Debt:    £22,045.36
Total Debt now: £10,967.21 

So... I've made a few changes at home and I am in a position to pay off a little more each month. at the moment my debts are: 

Tesco Loan (2.9595% APR) 
Minimum: £134.63

Santander Loan (11.9% APR) 
Minimum: £246.59

MBNA Credit Card (0%)
Currently paying: £65 

Sainsburys Credit Card (0%) 
Currently paying: £47.50 

My plan is to up the amounts - Whilst I know this is easily done for the 0% Credit Cards, How does it work with the loans? Should i ring and ask them to up the totals? or just make additional payments?

Should I up the CC or simply throw it all at the Santander Loan which has the highest outstanding and highest APR 

EssexHebridean

Loans can be tricky - first thing might well be to check whether they allow "ongoing" overpayments or whether you need to start saving a fund to simply pay off early. 

An other option is you have any eligibility might be to see if you can get a 0% money transfer card and pay off one or even both loans using that. (But yes, that Santander one is definitely the first to target).

well done though - half way is a great milestone! The second half will likely go faster too as you know what you're doing now! 

vixx_123

I can overpay my Tesco loan, so I have a regular overpayment standing order set up (on top of the DD) and I have the account set up as a payee for any additional overpayments during the month. The interest is front loaded, so it's motivating to see the extra money coming off the account with each overpayment!

Mimi_Arc_en_ciel

On the MSE Credit Club it says 50% of getting the top card (31 months 0%). The only markers on my file are: 

- Account stability 
- Too many applications (Although I don't recall applying for anything recently? How long does this stay on the file?) 

However - I have 80% Chance of getting a loan with the AA at 3.4% APR (Santander is currently 11.90%). It would need to be £5,000 to get the 3.4% but I could over pay Tesco with the £500 as a one off payment. If I did this over 2 years the cost would be: £215.68 per month, £176.24 interest. This is less than I am paying now per month, for the same time scale. 

If I did a new loan over 1 year it would be £424.26 a month, Which I have ran through my budget and could afford - This is £177 difference to what I am paying now. The interest back is £91.14 

This would mean:

Santander -> AA 
AA would be repaid Oct '22 

MBNA & Sainsburys - I'd carry on making the payments and pay them off before the 0% ends (or shift to 0%)

I would then only have Tesco Loan to repay, this time next year I would have £1,000 left.

I could, in theory, be debt free (almost!) before the end of next year, as opposed to my current prediction which is July 2023 

What are your thoughts on that?

EssexHebridean

It's by no means certain you will be able to get one loan to pay off another - check the T's and C's on that. Also check that the rate offered for that loan isn't just a headline - you're looking for confirmation that the rate offered is definite.  

On the applications, there is a section within the credit club site where you can see what it's showing, As a rule though they cease to have any particular effect after about 3 months I believe. 

Be cautious with drastically reducing your spare income - potentially better to take the loan over the two years but be sure that you will be able to overpay to it - that way you have the money if it turns out to be needed for anything, but if you reach the end of the month and still have it as surplus you can OP. 

Mimi_Arc_en_ciel

I think what i will do is: 

Keep the Santander as it is. Make additional payments of £177 - So i'd be paying £424 (Have checked with Santander and this is ok) - I will do this for a few months (until Jan/feb?) and make sure its feasible. Then look at loans/cards after