PayPal debt

Negativenap

I have over £2300 in PayPal debt and I'm struggling to pay it because the interest is 21%.
I don't really understand what the interest amount means, I just know my monthly payment isn't really paying anything off. 
I was trying to work out a way to pay it off sooner. If I paid for an example half of it off in a few months, would the monthly payment then cover more and pay more of it off?

I would be willing to live off toast for a few months and hibernate so I don't spend money, if it will make paying it off easier. 
The minimum amount is £85 a month.

Any help and advice would be amazing. I have autism and get confused by a lot of things. I've been paying the minium payment for over two years now and not really got anywhere so I've realised now I need to clear more or all of it soon. 

Unfortunately I'm unable to get a loan or anything from my bank to pay it off easier. 

Voyager2002

Yes: the more you pay today, the less interest is charged from tomorrow onwards. So make a big effort and send them some significant sums as soon as possible, and from then onwards more of your payments will go to clear the debt and less to interest.

Peter999_2

Hi Negativenap,

You are currently paying about £40.25 a month (4% of 2300 is £483.  £483 divided by 12 months is £40.25 a month) in interest and this will be why your £85 a month payment is not making much of a dent in it.

Voyager2002 is right about trying to pay off as much as possible.    If you pay off say £500 then that would save you £8.75 every month. 

MattMattMattUK

Negativenap said:

I have over £2300 in PayPal debt and I'm struggling to pay it because the interest is 21%.
I don't really understand what the interest amount means, I just know my monthly payment isn't really paying anything off. 
I was trying to work out a way to pay it off sooner. If I paid for an example half of it off in a few months, would the monthly payment then cover more and pay more of it off?

I would be willing to live off toast for a few months and hibernate so I don't spend money, if it will make paying it off easier. 
The minimum amount is £85 a month.

Any help and advice would be amazing. I have autism and get confused by a lot of things. I've been paying the minium payment for over two years now and not really got anywhere so I've realised now I need to clear more or all of it soon. 

Unfortunately I'm unable to get a loan or anything from my bank to pay it off easier. 

On a debt of £2,300 with an APR of 21% that means you are currently being charged a £40.25 interest per month, so only about half your minimum payment would go to paying down the debt. 

If you kept paying the same payment of £85 per month it would take 29 months to clear the debt, table below with monthly payments, months to clear and interest paid.
Monthly Payment / Months to clear / Total interest
£85 pm / 29 / £598
£100 pm / 24 / £509
£150 pm / 16 / £344
£200 pm / 12 / £262
£300 pm / 8 / £181
£500 pm / 5 / £117
*There is some slight rounding on the months and so a few pounds or pence in the interest. 

As you can see, paying more than the minimum is very beneficial, you will clear the debt quicker and also pay far less interest. You need to work out what you can afford, but paying more than the minimum is the way to go and also do not reduce the amount you pay as the minimum drops, which it will do once the debt starts to go down. 

DullGreyGuy

Negativenap said:

I have over £2300 in PayPal debt and I'm struggling to pay it because the interest is 21%.
I don't really understand what the interest amount means, I just know my monthly payment isn't really paying anything off. 
I was trying to work out a way to pay it off sooner. If I paid for an example half of it off in a few months, would the monthly payment then cover more and pay more of it off?

I would be willing to live off toast for a few months and hibernate so I don't spend money, if it will make paying it off easier. 
The minimum amount is £85 a month.

Any help and advice would be amazing. I have autism and get confused by a lot of things. I've been paying the minium payment for over two years now and not really got anywhere so I've realised now I need to clear more or all of it soon. 

Unfortunately I'm unable to get a loan or anything from my bank to pay it off easier. 

How it works depends on if it's structured like a loan or a credit card. PayPal Credit is normally basically a credit card so if you paid off half in a few months time then what happens automatically is your minimum payment goes down. If you continue paying the same £85 however that will mean your interest is lower so more of your repayment will be going towards the debt rather than just clearing last months interest. 

sourcrates

Of course if you can`t pay what they are asking, stop paying altogether.

PayPal will default the debt, and assign it to a debt collector, you can then pay whatever is affordable to you.

Obviously this is a last resort, as it will negatively impact your credit report.