Martin Lewis & # 39; & # 39; How To Decrease All Debt Prices' January Grasp Class
- Always follow the golden rules for transferring money:
a) Never miss the minimum monthly repayment
b) Erase the card before the 0% ends or pay the higher APR
c) Don't spend / don't withdraw money. It's usually not at the cheap price
d) Normally you have to transfer within one to three months to receive the 0% deal check
e) You cannot transfer between two cards in the same bank group
Full help and information under Best Balance Transfers (see APR examples).
Covid Help: If you have financial problems due to the pandemic, you can request a vacation with credit card payment, but only if necessary as interest rates are still rising.
2. SAVE CARDS: move them to 0% like credit cards
Business cards are just credit cards that you only use in a business chain, but usually with a far more expensive interest, e.g. B. New Look is 28.9% per APR, Argos 29.9%. But you can also settle the debts on your loyalty cards, so just follow the help above.
3. OVERALLS: Be careful. 40% rates are the new normal – there are ways (some urgent) to move them down to 0%.
Many people think credit cards are bad and debit cards are good. Not if you're overdrawn – almost all of the big banks are now charging around 40% on overdrafts, even doubling a credit card on the main street – which makes them a serious risk to debt. If you pay that, take action. Read our 10 tips for reducing the cost of overdrafts, but here's the most important information …
a) Ends for some on January 31st. £ 500 0% overdraft if Covid has financial problems. Banks are no longer required to provide 0% official Covid-related overdrafts, but Lloyds, Bank of Scotland, Halifax and Santander are. with three month up to £ 500 0% on request for those who have problems. Those with Lloyds, Bank of Scotland or Halifax have until January 31st to apply, while Santander's embargo has been extended to May 4th, 2021. If staying afloat is difficult, speak to other banks as many can offer help. Complete information and how to apply in Covid's overdraft assistance.
b) Switch to a 0% overdraft. If you can't, or can't get, the above assistance, or want to stay at 0% for longer, many accepted newbies at First Direct * and M&S Bank receive an ongoing overdraft of £ 250 0% – great when you owe a lesser amount.
Alternatively, Nationwide FlexDirect * offers a major 0% overdraft for one year, although the size depends on your creditworthiness. Think of this as a respite and try to clear it up beforehand. Cross the line on all of these and the EAR variable is 39.9%. Complete information and authorization help for all these accounts in top overdraft accounts.
c) Use a 0% money transfer credit card. For larger overdrafts, some special cards also allow a transfer of 0% for up to 18 months. The card pays cash directly into your bank account and clears your overdrafts so you owe them instead.
It can be of great help as Tricia emailed: "Had an overdraft of £ 3,000 so I took a 0% transfer at a one-time fee of 1.9%. The account is now in credit and the card is redeemed for 12 months. Result. "
4. PERSONAL LOANS: Can you cut the interest rate to 2.8%?
If you have a loan, can you get a new one to settle it and pay less? MoneySaver emailed Sean, "Two years ago we took out an 11.9% loan. After reading your guidelines, we received a new 5.9% loan to repay. " Savings of £ 2,164 in interest. Wouldn't have had the confidence without you. Many Thanks."
However, this is more difficult as it is not just about getting cheaper APRs. Full help reducing existing borrowing costs, but here are my quick steps (shall we dance) to check …
– STEP 1: Ask your current lender for a settlement number. That is, how much it will cost to pay off your current loan, including any prepayment costs (which tells you how big a new loan must be to pay it off).
– STEP 2: Find the cheapest payroll loan – and whether you can actually get it. Our loan eligibility calculator shows your chances of being accepted for many loans, and that's the best way to go.
The lowest prices currently available include Ratesetter * 6.9% for £ 3,000 to £ 5,000, Ratesetter * 2.8% for £ 5,000 to £ 7,500, Cahoot *, TSB * and Ratesetter * 2.8% for £ 7,500 to £ 15,000. More in cheapest loan. For loans under £ 3,000, 0% money transfer cards are usually cheaper.
Be warned, however, that all of these loan rates are "representative APR" which means that unfortunately only 51% of accepted customers will need this rate.
– STEP 3: Find out if a new loan is cheaper than your current one. Multiply your monthly repayments by the number of months remaining (ask the lender if you don't know) how much you will pay if you stay, then plug all of the numbers into the MSE Loan Switching Calculator.
Covid Help: If you are having financial problems due to the pandemic, you can apply for loan payment vacation, but only if necessary as interest rates are still rising.
5. Mortgages: Will You Cut Your Mortgage Costs by £ 1,000?
The UK policy rate is at a record low of 0.1%, which is affecting mortgages. So this should be the perfect time to find a cheaper deal. The problem is that for those with little equity in their home (that is, your mortgage is a large proportion of the value of your home), many mortgages have been drawn.
Still, it's worth checking them all out as the cheapest prices for two-year fixes are 1.14% and for five-year fixes it is an impressive 1.29%. So check to see if your mortgage business is near the end or has already been closed. As Helen wrote via email, "I did a debt restructuring – the rate has changed from about 5% to 1.48%, which was set for five years. This is the same a saving of £ 45,000 in the five years. Thanks to your website. "Here are four quick tips to help you:
a) Obtain my free 66-page debt rescheduling booklet (or the first-time buyer).
b) Benchmarking your best interest rate with our mortgage comparison tool *.
c) Consider using a mortgage broker to find the best deal as they have information about acceptance opportunities that are not available to the public.
d) Use the ultimate mortgage calculator to find savings, compare offers, determine overpayment profits and more.
Covid Aid: If you have financial problems due to the pandemic, you can request a vacation for mortgage payments, but only if necessary as interest rates are still rising.
Mortgage Trapped? MoneySavingExpert.com (MSE) and I are still committed to this. I recently met the finance minister responsible to discuss this. See our mortgage prisoners need government help.
6. BUY NOW, PAY LATER: Maybe interest free, but it's still debt and be careful, it's unregulated
You can't cut the cost interest-free so this is just a warning. Klarna, Clearpay, Laybuy and other companies that buy now and pay later (BNPL) have quickly become an almost ubiquitous payment method for many online retailers and offer to spread the costs over a few weeks or months.
While there is no interest, if it goes wrong you can expect late fees, marks on your credit record, or even bailiffs. These companies make money because they are so good at tweaking our expense nipples so that we always want to buy more. So be very careful.
Worse still, BNPL is unregulated so if something goes wrong you have few rights and you cannot take them to the Ombudsman. That needs to change – see my evidence from the Finance Committee "BNPL needs to be regulated".
7. PAYMENT LOAN / HIGH COST CREDIT: You may be able to reclaim and receive payment and interest vacation
Payday loans are an interest and financial nightmare. Try to avoid them whenever possible. If you have them, check out our guide to payday loan help. If you have financial problems due to lockdowns, you can apply for a month's payment and interest leave. Unique to payday loans, interest rates are frozen during the holidays, so this is a great option.
If you had one before, you may also be able to reclaim payday loans. As Jimmy wonderfully emailed, "Follow your directions and contact about a dozen payday lenders. In total, I've now received over £ 7,000 back. I shudder at what condition my finances were actually in … but your guidance has helped me take a much better position. Many Thanks. "It's also worth noting that you can also claim back surety loans.
8. TRICKS AT COST: It's not just what you do – it's the way you do it …
Whether or not you are accepted for cheap deals, always try to cash out as much as you can ASAP (without affecting your financial stability). A few things help with this …
a) Prioritize repaying high interest debt first. It grows the fastest. List all debts in order of APR, highest first, then use all of the cash to make up and only pay the minimum on everything else. Once it's clear, focus on the next most expensive ones.
With overdraft rates so high now, for many it means that at least you'll have to pay your credit card to get your overdrafts. Really difficult to deal with sad.
b) savings? Use them to pay off costly debts. Many people are emotionally attached to savings in the bank, but remember, in practice, when you save, you are only giving your bank one loan. However, it usually pays you less than it charges when you borrow it. So if the interest cost on debt is higher than you save (it will be for most), use the savings to pay off the debt – provided there are no penalties for doing so.
In most cases, it pays to withhold three to six months' worth of bills in an emergency fund. However, for credit cards, which are an open institution and cost a lot, you can use your emergency fund to process them. Then, if an emergency arises, borrow back so you don't get any worse, but save in the meantime.
c) Make a budget and manage your money. Get control of your spending – budget to see where the money is going. What really matters is how you control it – try my piggy bank system.
d) Increase your credit score. In the future, you will be entitled to better offers to reduce debt costs. Check out my 27 Ways to Improve Your Credit Score Guide.
e) Fighting debt is best done with friends. You may find great inspiration on our forums for Wannabe Debt Free and Wannabe Mortgage Free MSE Forums.
9. IN THE DEBT CRISIS? Get free, nonprofit help
If it's tough, the above cost-cutting solutions may not be for you. Three quick questions:
a) Are you struggling to meet your minimum monthly repayments?
b) Do you have debts in excess of an annual salary without a mortgage / student loan?
c) Do you have sleepless nights or depression / fear of debt?
If the answer to any of these questions is yes, instead of the above solutions, I will get free individual advice from Citizens Advice, National Debtline, StepChange or CAP. They are there to help, not to judge. The most common thing I hear afterwards is: "I finally slept well."
And believe that things can get better. Read inspiring stories on our Debt Help forum, and also check out our guide to mental health and debt. Complete information in the debt crisis help.