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Working out debt repayments?
getmeouttahere
Posts: 195 Forumite
In an attempt to try and tackle our debts, is there a way to work out how much a repayment for a specific credit card/catalog will be and how much the interest per month will be so we can work out what the minimum payments will be for the next 12 months?
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Comments
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Take the amount outstanding multiply it by the interest rate divide by 12. That will just cover the interest though. You'll need to pay more to pay off the balance. The amount could be a percentage of the outstanding balance or a fixed amount per month.:footie:
Regular savers earn 6% interest (HSBC, First Direct, M&S) Loans cost 2.9% per year (Nationwide) = FREE money. 0 -
Take the amount outstanding multiply it by the interest rate divide by 12. That will just cover the interest though. You'll need to pay more to pay off the balance. The amount could be a percentage of the outstanding balance or a fixed amount per month.
Thanks, that's really helpful as at least I can work out what the interest is likely to be each month0 -
If you want to figure out the interest you are paying each month, maybe try putting into a debt snowball calculator? You could use it by entering the minimum payment, and the APR of the card. This will show you how much interest you pay each month. If you enter all your debts, it can show you how much interest in total you will pay, how long it will take to clear, and which you should focus on first to save yourself interest payment. You can also play with how much you are willing to pay each month, to see the difference it can make.
http://www.whatsthecost.com/snowball.aspx
For example, if you enter your Woolworths debt (taken from other thread) into the calculator, if you pay £30 a month (just above the payment you listed in your SOA) it will take you 17 month to repay it, during which you will pay £104 in interest. The interest you pay goes down as the balance reduces, so as you go on your £30 payment starts to reduce the capital instead of paying the debt.
Would work best to plug the whole lot in there.0
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