New to the forums

joseph_2

Hi all,

Im new here, and have found all these stories and people willing to help inspirational. Im currently trying to clear an overdraft and have found a way that works for me (i worked this out before i found this site) but is quite complicated to explain. Any way is there a thread any where that explains certain terms used here. The "snowballing" one has got me stumped!!!

Joseph

Justin_Credit

Hi Joseph,

I'm not sure whether there is a thread explaining terminology used on the boards but I will have a go at explaining 'snowballing'.

Let's say a person has 4 separate outstanding debts from different providers. Let's also assume that they have £200 per month to throw at those debts.

They are usually advised to pay the minimum payment on 3 of the debts but to pay the remainder of the £200 off of the debt with the Highest % APR.

This continues every month until the debt with the highest interest rate is paid off.

Once this has been achieved the debt with the next highest rate is tackled in the same way and the minimum payment is made on the other 2.

The monthly sum remains at £200 throughout, so this I believe is the quickest and most efficient way to become debt free.

I hope that I have explained this ok and it is of some help. I know there is a site where you can put in the figures and apr's of your debts and it will work it all out for you but can't remember it at the mo.

JC

debtbuster2K5

Hi,

JC has it about right.

Try here for a snowball calculator https://www.whatsthecost.com/snowball.aspx

Regards