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Best order to pay off debts...
felinefancy1978
Posts: 1 Newbie
...Hi
I am new to this and am only recently in a position to seriously start repaying my large debts. I owe 11 debtors varying amounts with varying interest rates and credit limits. I have read on this site to pay off the most expensive first but also read that the more credit you have (used or unused) can will also affect your credit rating and at the moment I am unable to get a good deal on a consolidating loan or balance transfer credit card because I am over committed. M
My questions are:
1. what order I would be best to pay off in, (i.e. my most expensive card is not necessarily the one with the largest credit limit) so should I pay them off one at a time to reduce the lenders and overall credit available to enable a cheaper interest rate / interest free on the bulk or should I clear the most expensive ones first or should I up my payments on them all equally and clear them at the same time but more slowly.
2. Does asking lenders to reduce the credit limit on card/catalogue accounts help to improve credit ratings by reducing your overall available credit?
Sorry if these are really obvious questions, but now I have my head firmly out of the sand I am on a mission to be debt free asap.
Thanks in advance for any advice.
I am new to this and am only recently in a position to seriously start repaying my large debts. I owe 11 debtors varying amounts with varying interest rates and credit limits. I have read on this site to pay off the most expensive first but also read that the more credit you have (used or unused) can will also affect your credit rating and at the moment I am unable to get a good deal on a consolidating loan or balance transfer credit card because I am over committed. M
My questions are:
1. what order I would be best to pay off in, (i.e. my most expensive card is not necessarily the one with the largest credit limit) so should I pay them off one at a time to reduce the lenders and overall credit available to enable a cheaper interest rate / interest free on the bulk or should I clear the most expensive ones first or should I up my payments on them all equally and clear them at the same time but more slowly.
2. Does asking lenders to reduce the credit limit on card/catalogue accounts help to improve credit ratings by reducing your overall available credit?
Sorry if these are really obvious questions, but now I have my head firmly out of the sand I am on a mission to be debt free asap.
Thanks in advance for any advice.
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Comments
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Hi & well done for posting. First of all you may want to put your SOA up on here to see if the good people here can help you reduce your outgoings,therefore helping you to free up more cash to pay off your debts. Also take a look at www.whatsthecost.com & put in your debts,APR's & monthly payments which will help you to prioritise which debts to tackle first. Also please try to steer clear of consolidating,as you will end up paying £1,000's more in interest & many people end up back at square 1 by doing this. Good luck!!Debt at LBM(July 1st 07)-£35,053.92 Debt on 1st Anniversary of LBM(July 1st 08)-£33,170.11 (31st January 09)-£32,318.73Paid off so far £2,735.19(7.8%) Average paid off p.m. £143.95 L/H supporter 115 DFD target February 2018 DFD March 2028. PAD(Started 28/12/08) £253.77 £10 a day Feb £110/£280 WEDDING Paid off £1,585.96 Saved Up £925.400
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In general pay off the card with the largest apr first.
As for the credit rating thing i think it depends on lender.MF aim 10th December 2020 :j:eek:MFW 2012 no86 OP 0/2000
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I'd definitely second the recommendation of whatsthecost.com, fantastic website which really helped us prioritise our debts and focus on our payments. Also gave us a debt free date which has been a really helpful in giving us something to work towardsThanks for the advice Martin! :money:Member no. 920 - Proud to be dealing with our debts0
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