Repayment Plans

The Grabber's repayment plan section, covering difficulties with clearing debts and managing finance.

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Repaying your Debt

Does it feel like you're under a mountain of debt which is pressing down on you and you're unable to get out? If you are juggling bills and struggling to make your repayments, you could be doing harm to your credit rating and may end up with problem credit.
It might be time to clear your debts, easing the burden and freeing up money which currently goes on repayments. If you pay £200 a month to lenders in repayments, clearing your debts would make you £200 a month better off.

If you have debt problems, how do you make it out and ditch your debt?
Unfortunately you are going to have to be determined and it will take time. Make a plan of repayment, stick to it and when you come out the other side you should be debt free.
The money you can save yourself should make it all worth while.

Stop Borrowing

The first step in your repayment plan should be to stop borrowing, you are aiming to clear your debt not move it around. And moving debt back and forth between lenders may lead to a footprint on your credit file, which might harm your credit rating. Only move debt to another lender if it saves you money, don't make the situation worse.

Comings and Goings

You should make a list your outgoing expenses and compare it against your incoming finances. Be brutally honest, since you are only kidding yourself. Cut out any waste, the things you don't need, you want to create more budget to use repaying your debts.

Save Money

Now the hard part, you need to save even more money on the remainder of your obligations. This may mean less nights out partying or no foreign holiday or expensive gadgets.
Can you ditch the satellite telly and do you need high speed broadband internet? Slower speed broadband is cheaper.
Put away or destroy your credit cards and don't use them any more. If you have loans, is it possible to consolidate them and transfer them to a lender charging less interest? What about your mortgage, can you save on repayments by re-mortgaging to another lender?
Go through your list of outgoing expenses in turn and see if you can save money on any of them.

The Creditors

Be aware of your creditors, who do you owe, and how much? List them in a order of urgency.
To set the urgency essential services should go first utilities, like gas, electric and the mortgage. These have to be paid on time and in full.
Then list those creditors who charge the most interest on their debts. Then list in order of the size of the debt owed. This list should be kept and when a creditor is repaid you can cross them off.

Budget

What are the repayment amounts and can you cover them all with your available budget. If not contact the lenders charging the most interest, informing them of your difficulties and ask if the repayments can be reduced.
This may increase the size of the debt owed but could help make things more manageable. Your ideal target is to be able to make more than the minimum payment on all the debts, which reduces any interest charged on outstanding balances.
An alternative plan of repayment could be to ensure you make minimum payments on all but one debt and concentrate paying off one creditor at a time, this may be easier to manage but may not be the quickest way to clear your debts.
Remember, the longer a debt takes to be repaid, the more that debt will cost.

Get Help

If you are struggling to work out a budget or struggling to cope, contact a free debt specialist. Don't pay for it, there are free organisations like the citizens advice bureau who offer free debt advice. Their advisers will also help with any benefit entitlements and your legal rights and will represent you in court if its necessary.

Stick to the Plan

If you have a repayment plan you must stick with it. You are not going to have money to splash out and it may be a while until you do.
But sticking to the plan will enable you to be debt free, and surely that's worth a bit of hardship.