debt, what to do?

Question

say you 10k in debt and the payments were just about managable. You find out that at the current rate of interest you will be paying it off for the next 10 years!
would you continue to pay the same amount off but be able to go out. or up the payments and cut the fun out of your life for 5 year?

Answer 1

You will feel free as soon as you get out of debt. The sooner, the better, whatever it takes.

Here's a tool that will help you set up a monthly payment schedule and you can see what a difference it makes to concentrate on one debt, then roll all that money into the next and so on...
http://debt.bizcalcs.com/Calculator.asp?Calc=Debt-Elimination

Good luck to you!

Answer 2

Hi- I would recommend a comprimise between these two ideas.
Try looking for a lower interest rate than you have just now that way you could either A) keep the monthly payments about the same and pay it off sooner or B) or reduce the monthly payments and keep the same term.
If your debt is in the form of credit cards or store cards then the interest rate is probably quite high and you might be better off consolidating with a personal loan or if you have a mortgage you could add it on to that. Try visiting your bank.

Answer 3

I would stop creating new debt, then:
1. Get a 1000 dollars in an emergency fund.
2. Get myself on a written budget. Give every dollar a name and a mission
3. List my debts smallest to largest. Pay minimum payments on everything except the smallest. Hit the smallest hard. When that's paid off, I'd use that money plus the minimum from the second debt on the second. And on and on until I was debt free.
4. Get a second job and use that money to knock out the debt.
5. Sell stuff to help knock out the debt.

I don't know what you make, but it shouldn't take five years if you use the method I described. I live the benefits of this plan.

Answer 4

That is a very difficult situation to be in and I am sure you are not the only one in debt of that amount. It can be difficult at times but you have to persevere to clear your debt. Maybe what you should do is apply to consolidate your debt through maybe a loan if you havent done so already. This way there will be one individual payment going out each month instead of several. You will know where you stand each month this way. You could also try and budget, buy cheaper brands of shopping, food, etc. This way you will still have money to go out with and also live on. Yes you have to come with terms your lifestyle possibly changing but it could strike that balance you are looking . Its also good to become better at organising your payments and managing your monthly income by making a budget plan and sticking to it as much as possible.

Answer 5

cut the fun and pay off your debt in the shortest possible time.

if you are talking about credit cards- and paying only the minimum payment, then you will be paying it forever...because the minimum payment only covers the charged interest and a bit more...so you are not even paying the debt, you are only paying the interest...which you should up the payments if you want to repay the debt...

i hope you are not owing money to a loan shark, then you're pretty much screwed...and forget about the fun.

believe me, you will have plenty more fun when you are debt-free

Answer 6

I think it is fundamental to look at how much of your monthly income is being used to repay the debt. If you over-repay are you going to leave yourself short and then end up borrowing more to fund the fact that you've run out of money by paying off debts. I.e. giving with one hand to take with the other (I know from personal experience!).

I think even as much as it can be frustrating a smaller, more manageable amount over a longer term if much better than over-committing short-term and ultimately compounding your problems.

Also bear in mind when applying for a mortgage the lender will apply a 12x multiple to the monthly repayment and then deduct that from your salary (in most cases for loans) or 5% of the total balances outstanding on credit cards. So if you take a loan over a shorter time then the amount deducted from your salary is greater. If you have credit cards my suggestion is cut them up and wrap them up into a manageable fixed rate loan.

to look at loan rates go to www.moneysupermarket.co.uk
Good luck.

Answer 7

Are you talking about a debt to one company or several? If you have debt to more than one company, pay off the smallest one as soon as possible, then apply that payment to the next. Pay extra to the principal each month if possible. Be disciplined to stay out of debt.

Answer 8

Being in debt is no fun. You pay now or pay later. Pay the same amount, however, add a secondary amount towards the principal AND QUIT MAKING MORE DEBT!

There is sunshine at the end of the rainbow. The decisions you made that got you in debt were likely made a long time ago, however, now, you are on a terrific path towards a terrific future!

Answer 9

Your best options are:

1 - Cut your expenses down and pay off the debt faster.
2 - Get a part-time job and turn they entire paycheck over to the debt, in addition to your regular payments. This will knock it out fast.

Answer 10

There is a government scheme called "IVA" which means individual voluntary arrangement, this is kind of a last resort for people in debts of £10,000 and over to stop you going into personal insovency, you enter a legal agreement to pay a certain percentage of your debts over a 5-7 year period, your interest is frozen and they keep the creditors at bay for you.

Not to sure of the minor details but i'd look at your other options before you commit to anything, nothing is ever as bad as it seems, don't ignore your debts it will only make it worse, speak to the companies and arrange to pay what you can.

Good luck matey!!