Where to Find Money for Extra Debt Repayments

It’s a good idea if possible to repay more than the minimum on your debs every month. This will significantly reduce the amount of interest you end up paying before the debt has been fully paid off, and will help you to be debt-free sooner. However, it may be that you are only just able to make repayments at the moment or aren’t happy paying any more than the minimum in case the rest of your income is needed to cover some financial emergency. If this is the case but you still want to be debt-free as soon as possible, there are a few places you might be able to find some extra money to pay back your lender.

Little Cutbacks

It can be surprising how much you can save by making just small cutbacks in your lifestyle, and these little sacrifices can be used to find extra money for paying off a debt. Let’s imagine Elizabeth stops into a major chain coffee shop every morning on her way to work for a coffee, which costs £2.50. In the middle of the afternoon, she buys a chocolate bar from the vending machine for 80p as a pick-me-up. On the way home, she is usually thirsty so she buys a bottle of mineral water from the vending machine at the station for £1.

If Elizabeth gave up the coffee and the chocolate bar and started refilling her water bottle and taking it with her each day, she would save over £21 a week. Over the course of a year, she would rack up £1118 worth of savings which could be used to help pay off debts. Of course, you can’t be expected to give up every little pleasure but this shows how much small savings rack up. Her coffee alone (a fairly common habit) would save her £650 a year. If she really can’t give up her coffee and chocolate, she could still save most of this money by drinking instant coffee in the morning and buying multipack chocolate bars and taking one to work every day.

Your Possessions

You may be able to get a little extra for repaying debts from selling some possessions. Just as making little cutbacks doesn’t mean giving up every single luxury, so this doesn’t have to involve pawning your family heirlooms and selling your wedding dress. Rather, it means parting with things you no longer need but may still have hanging around.

Gadgets can be some of the best money-makers, but at the same time they depreciate quickly as technology moves on so it is best to get a move on with selling them. Old mobile phones made obsolete by a free upgrade, abandoned computers, and old games consoles can all be worth selling to get extra money to help shift your debts that little bit sooner. If you have any very old items that have been hanging around for many years, such as vintage computers or games consoles from several “generations” ago, their value may have gone full circle and you might find these items are now collectable.

 

How the banks haven’t been so ethical – PPI

Payment protection insurance is a type of insurance policy that repays loans or credit card payments when customers come across financial difficulty caused by sudden sickness, accidents or injury. Like any financial product, PPI had certain terms and conditions that had to be met to enable a claim on the policy, and had certain exclusions that applied.  These however, were often not relayed to customers, and neither were the eligibility criteria.  Those who were self-employed or retired, for example, were not eligible for a PPI policy so they shouldn’t have been sold one. But they were, and millions of customers were duped into purchasing this insurance and paying additional premiums on top of their borrowing repayments.

When the number of complaints about PPI reached a high volume, an investigation found that PPI was mis-sold to customers by banks and other lenders in about 90% of cases.  The law took the side of the consumer and the unethical practices of the banks were put in the spotlight.  The High Court ruled the banks were to refund all customers mis-sold the insurance policy, with interest added to the compensation amount too.

The Lloyds Banking Group takes the crown for the largest amount of miss-selling of PPI policies. By the end of 2012 they had spent approximately £4.3bn in compensating their PPI claims victims. The Lloyds Group had also been fined however, at the cost of millions, for delaying compensation payments to customers.  Like many of the banks, they were very quick to take people’s money and to demand repayments and induce fees and fines where it suits them, however when it comes to paying up themselves they are far from prompt.  HSBC and Barclays have also allocated millions to repayments for mis-sold PPI.

If you have been affected by mis-sold PPI, seek to claim your money back now.  Get your claim in as quickly as possible as the banks are doing their best to try to force a deadline for PPI compensation payments to customers. This is worrying as many customers (millions who still don’t even know they have PPI) are yet to make a claim.  Check your loan or card agreement now. To make your claim, see here on how to proceed.

The average payout amount for successful PPI claim compensation is £3,000 – an amount that could make all the difference to so many individuals and families out there today.