PayPal credit

SARAHBEGGS1995

Hello. My husband has around 5,000 on PayPal credit and the interest rate is about 29%. We’ve been paying off around £200 a month for a while but it’s not going down very quick. Does anyone have any advice on what’s best to do in this situation? 

Many thanks 

Mark_d

With such a high interest rate it's hardly surprising your debt isn't going down quickly.  Out of the £200 you pay each month, only £75 goes to pay off the balance whilst the rest of the payment goes towards the interest.
The best thing do to is borrow money at a cheaper interest rate, use this to repay the Paypal debt, and then make monthly payments towards your cheap debt.  You can possibly access cheap borrowing using a 0% balance transfer deal on a credit card.  But also regular unsecured loans appear to be a lot cheaper than what you currently pay to Paypal.

Brie

I agree with Mark that the interest is gobbling up the majority of the payments made so something needs to be done. 

I also agree that if it's possible to move it with a 0% balance transfer to a credit card that will help.  Do be sure there's nothing else on the card and it's not used for purchases as that will defeat the purpose of getting the interest payments down.  

I wouldn't agree with getting a loan - likely with a large paypal debt the interest rates won't be as good as might be available in general.  Also there's the issue of lenders not being helpful about lending money to pay off debts - it's very risky as there's no guarantee the loan will be used for that purpose and it just doubles the trouble for the applicant.  

I'm guessing that this might not be the only debt you/he have so if that is the case I suggest swinging over to the debt free board.  Fill out the statement of accounts (SOA) that is on one of the top stickies and post it so others can help you out with the situation - it's a friendly helpful crowd so don't be worried about the reaction you might get.  Your alternative is to fill out the SOA and then talk to one of the major debt advice agencies - StepChange, NationalDebtline, Community Money Advice (CMA) or Christians against Poverty (CAP).  They will help you manage the various debts and help you find a solution.  

Hoenir

Scrape together every £ you can to address the debt. Short term sacrifices make for long term gains.