09 Mar 2015

A question about : Bit of advice with paying debts off

Hi.....I am new to the site and am after a bit of advice.

My wake up call was last year when I got too afraid to answer the door each time it knocked, never knowing if it was a debt collector......

Before Christmas I promised I would stop shredding the mail (unopened) and deal with things. It wasn't as bad as I thought. The companies were all understanding and We are now on a repayment plan with all our debtors.

Total debts are 50k, spread over 5 credit cards. We are on repayment plans for all of them, varying from Ј40-Ј150 per month. Our choice to do these amounts. The interest is frozen.

We as in a position to start tackling paying them off.......(hubby now is back at work following illness and redundancy).

Using the snowball calculator, it's going to take us til 2036! Hope not. Should we concentrate on one debt, largest first.....(18,000, 14000, 10000, 6000 & 2000 approx)

We are able to make overpayments some months..........
Any advice would be fab......title=Smile

Best answers:

  • As long as the interest is frozen on them all then it doesn't really matter what order you tackle them in. Personally, in those circumstances I'd actually start with putting any overpayments to the smallest first. That way you'll reduce your number if creditors much more quickly. Once the Ј2000 debt is paid you could then also put those monthly payments to the next one up the list. I imagine this will give you a bigger psychological boost. Remember, any overpayment, however small, helps to bring your debt free date forward. Good luck :-)
  • Hi themorrisfamilyof4
    We are in a similar position to yourself and have just waiting to start a DMP with Step Change. Good luck with your journey.
  • Hi Morris Family Representative!
    Congratulations on pulling your head out of the sand and taking up the challenge. A massive step for you and significant achievement!
    The most financially efficient method of snowballing debts is to focus all the surplus money available from your monthly budget to the highest APR first whilst maintaining minimum payments on the rest.
    Some people prefer the 'psychological' approach to snowballing. Here you focus on the smallest debt first and work your way up.
    The first approach is better financially as it reduces money lost on interest payments. The second approach allows you, quite quickly, to see the progress visually but costs more for the duration of the repayments (due to interest).
    Its your choice. Just make sure you are disciplined and keep to whichever schedule religiously.
Категория: