Paying off debt early

GeorgeUK

What was the question?

I would definately get rid of the PPI - can't see any need for it.
To find out how much you will be paying, request an early settlement figure from them. There is no obligation to take it there and then.

Those are nasty interest rates. I would be temted to get rid of the 1st loan, then save like crazy to get rid of loan 2. The settlement figure will take into account some of the interest they will be losing so may be higher than expected.

You may want to try looking at the snowball calculator to see how much you will be paying in interest and see which gives the greater saving.

Have you got a decent credit rating or is this why those rates are so high? Was wondering if you could get a 0% creditcard to make up and shortfall in paying off loans 1+2. That would save you more, but not sure if that's an option for you. Looks like you've had 2 loans in the last 3 months though so probably not.

fairmorn308

Can i cancel the PPI while i still have the loan and how do i go about it?

Will i get refund aswell?

GeorgeUK

I think you would only get a refund if it was missold to you.
http://www.moneysavingexpert.com/reclaim/ppi-loan-insurance

Just been reading PPI stuff on the loans board. Looks a bit of a mess actually. From what i've read, different companies have different ways of dealing with a cancellation of PPI.
Some will take it off and adjust your monthly payments
Some will insist you pay back the full loan and will need to reapply for a loan again
Some will take it off but increase the interest rate.

Might be worth posting on there incase anyone has dealt with welcome finance. Personally i would write to them asking them to cancel the PPI and that they give written confirmation when done. If they are unable to cancel it, ask they state why it can't be done.

http://www.fsa.gov.uk/pages/Library/Communication/PR/2007/043.shtml

hypno06

Did you put your figures in the snowball calculator?

tyllwyd

fairmorn308 wrote: »

Welcome finance loan

Credit : £2500
PPI: £1074.88
Personal Accident plan: £175
Lifecare 24: £195
Total Credit: £3574.88
Term 24 months
APR: 63.91%

Term Left: 22 months

I put the figues into a calculator (http://www.moneymadeclear.fsa.gov.uk/tools.aspx?Tool=loan_calculator)
and assuming that you paid the Personal accident plan & lifecare 24 up front, you would be paying off £3204 over two years at 64% interest (ouch), at about £239 a month, which matches with your figure.

I've got to run so I can't try to get better figures, but since you've only been paying for a couple of months I guess you are paying something like £170 interest per month out of that £239, so you must still owe them something like a bit over £3000. My maths is not the best though, so if anyone else can come up with better figures, please do!

fairmorn308

payday is 2mo and am not sure what to do?

start throwing money at overpaying at the above companies or throw the money into a savings account and then pay it off at once and let myself gain off the interest

GeorgeUK

The interest you gain will not be anything like the 63% you are being charged so there is no point in saving right now. I take it getting a 0% CC like virgin was out of the question then?

If there is no penalty for overpaying, then by all means overpay the 1st loan as the APR is the highest. I'd contact each and ask what the early settlement figure would be - it doesn't mean you need to pay this just by asking. It should give you a better idea of how to plan tackling these debts.