$29,384 of this is my student loan and the rest is made up of a car loan, a bank loan, a personal loan, a bank overdraft, one hire purchase, one finance card, two store cards, a neglected phone bill, an equally neglected power bill, a work and income bill (from when things were REALLY grim) and a bill from a budget advisory company. (More on that later).
I am paying off my student loan (and have been since 2006) through my tax, which works out to be just under $150 a month. A small amount, I know, but for now, that’s all I can afford. I’m not too concerned about that portion of my debt as long as the government keeps wiping interest on student loans, I will continue to pay it off through my tax until the rest of my debt is clear.
What does worry me though is the amount of interest being charged on some of these debts. When you’re young, stupid and at times, desperate for money, your eyes tend to skip over the interest rate being charged by the company you are ever-so-carelessly signing your life away to. That is why I am now paying $291 a month in combined interest on these bills. Just to reiterate, $291! Do you realise how much faster I could pay off my bills if I wasn’t paying so much interest? Of course you realise that, as do I. I just wish I had realised it back then.
Out of the eight bills I have that I pay interest on, five of them have an interest rate of over 20%, one of which is 27.5%! Now I’m not usually one to put an exclamation mark after a percentage sign but in this case I feel it is justified.
Is anyone else paying loans, credit cards or other bills with crippling interest rates, or am I the only one silly enough to be sucked into such a “deal”?