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I am both terrified and pleased by this. This whole 'borrowing from Peter to pay Paul' existence of mine is a creation of my own doing; I appreciate and accept that. The bank said 'no', so I went elsewhere to try and, today, an hour after applying for a loan, the money was in my bank account.
So. In full disclosure, I got £7,000 at a rate of 15.9% for five years (repayment total over that time is £9,828). I now have ONE reasonable monthly payment of £164.28, can pay extra as and when I can and pay it off early, both with no penalty. This saves me approximately £150 a month, giving me a little breathing room. Obviously, the sooner I pay it off, the less I end up paying.
So. In full disclosure, I got £7,000 at a rate of 15.9% for five years (repayment total over that time is £9,828). I now have ONE reasonable monthly payment of £164.28, can pay extra as and when I can and pay it off early, both with no penalty. This saves me approximately £150 a month, giving me a little breathing room. Obviously, the sooner I pay it off, the less I end up paying.
Repayments start on 24 November, so I have a month's grace. I'm pleased because even though the amount isn't QUITE enough to clear my entire debt load, the interest rate is half of what I currently have on my credit cards, so guess what's getting cleared first? One has already been done. I'm still expecting things to go through on the other one so am waiting for the numbers to change before I clear it.
I've put £1,000 directly into my savings account, as I also want an emergency fund. This is a flexible number, but is a good place to start. This can also be used to towards the loan, which seems a little contradictory, but I'm going to see how I go in the next 12 months.
The other half of the loan is going back to Canada to continue paying down my debts there. With the current exchange, that will give me approximately a year's worth of payments. I'm sure there's a way to set recurring payments, so I'm going to look into that over the next few days and set that up. This gives me a year's grace, so to speak. Once that's over, then I'll have a second monthly payment to contend with, but by then the minimum payments will have fallen considerably and I can adjust accordingly.
I intend to get this paid off long before the five-year mark, however. It means some serious belt-tightening and watching every penny, but this is the 'terrified' part of the whole thing. I absolutely do not want to fall behind, miss payments, or in any other way mess this up. And I don't want to still have it in five years. Or four years. Or even three. It feels a bit 'loan shark-y' although has good general reviews and a good score from the financial overseer of such things.
Anyway, I am feeling a bit lighter now and with the right focus and plan, this feels much more easily resolved somehow.
5 comments:
now that you have told us this, we can encourage you to stick to your goals!!
I am glad this works for you. It is difficult to deal with debt and interest but sometimes, you have to do what you have to do.
Are you still looking for a side hustle?
Hi Gill! Thank you - yes, it's good to stay accountable, particularly in such a great, encouraging group, so I'm looking forward to advice, encouragement and the occasional difficult question! xx
Hi T'Pol! Thanks - I hope it works for me. It has to. I was, as I say, both pleased and terrified by this. The lower interest rate is a positive at least and the monthly payment reasonable. I will continue to search out a p/t job, but I think the first thing to do is to encourage my f/t employer to give me a raise! xx
I'm dangling the Cotswold trip as a carrot for when you are clear of debt my dear! When your have your high interest credit cards paid off you can snowball that money into higher payments on the loan. Good luck - good to see you working away on the debt! I just know you're going to get clear in a matter of a couple years :)
Hi Jane! That's a heckuva carrot. I'll make sure I use the money very, very wisely (like registering for an online portion of the programme I want to do next year). I'm one CC down already, as I say. The other one I hope will be clear before the end of the month. And that's a very good idea with the snowballing! xx
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