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  • FIRST POST
    • kubaroo
    • By kubaroo 14th Feb 18, 11:56 PM
    • 13Posts
    • 2Thanks
    kubaroo
    Clearing debts
    • #1
    • 14th Feb 18, 11:56 PM
    Clearing debts 14th Feb 18 at 11:56 PM
    Hi guys. We are in situation when we've got debts and we struggle to repay. Decided that we get rid off most of it this year. I've started working more than usual, plan is to get 2000 every month, we should have 500 every month extra.
    What u will do?
    Will u go first and repay credit cards,store cards or overdrafts? Or we should start with biggest APR?

    OVERDRAFTS - 4850
    CREDIT CARDS - 7300
    STORE CARDS - 2900
Page 1
    • fatrab
    • By fatrab 15th Feb 18, 10:10 AM
    • 744 Posts
    • 1,589 Thanks
    fatrab
    • #2
    • 15th Feb 18, 10:10 AM
    • #2
    • 15th Feb 18, 10:10 AM
    Hi,


    The general rule of thumb is to pay the debt with the highest interest rate first. But that depends how much your overdraft is costing?


    Post an SOA and you'll get a lot of helpful advice, here's the link:
    http://www.stoozing.com/calculator/soa.php


    Best wishes
    You can have results or excuses, but not both.
    Wannabe debt free by Dec 2022 - Wannalose 3st in the process - 1st 11lb lost so far
    April's Goals - 16/21 NSD - 17/20 Lunches - 23/28 AFD - 23/31 TAFD (take away free days)
    31 x 2 coins (#32)
    • datlex
    • By datlex 15th Feb 18, 6:24 PM
    • 1,600 Posts
    • 1,492 Thanks
    datlex
    • #3
    • 15th Feb 18, 6:24 PM
    • #3
    • 15th Feb 18, 6:24 PM
    Logic and clearing debt doesn't always go hand in hand. It is not always a good idea to clear off the one with the highest interest rate. To put it simply 100 at 50% = 150, 1000 at 20% = 200. If you are going via the interest rate go for the one that costs you the most. The other option is size of debt, so that you start with the smallest and then once paid off you add the payments to the next biggest. It really depends on what works for you.
    • fatrab
    • By fatrab 15th Feb 18, 6:40 PM
    • 744 Posts
    • 1,589 Thanks
    fatrab
    • #4
    • 15th Feb 18, 6:40 PM
    • #4
    • 15th Feb 18, 6:40 PM
    To put it simply 100 at 50% = 150, 1000 at 20% = 200.
    Originally posted by datlex
    No it doesn't. Your sums are wrong. 50% of 100 is 50, 20% of 1000 is 200. 1000 at 20% would be 1200.

    If you pay the debt off with the highest interest first you pay less in total at the end of the day.
    Last edited by fatrab; 15-02-2018 at 6:50 PM.
    You can have results or excuses, but not both.
    Wannabe debt free by Dec 2022 - Wannalose 3st in the process - 1st 11lb lost so far
    April's Goals - 16/21 NSD - 17/20 Lunches - 23/28 AFD - 23/31 TAFD (take away free days)
    31 x 2 coins (#32)
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