Which to concentrate on paying off?

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darren_5
darren_5 Posts: 177 Forumite
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edited 24 February 2018 at 3:32PM in Credit file & ratings
Hi all.

I have two debts I want to overpay on:

A loan of £2500 3% interest - I pay £134 a month

And

A credit card of £1600 - At 0% so I have been making a bit over the min payment.

Is it best to concentrate on clearing the loan or the credit card at 0%?

Which will affect my credit file the most? I'm looking forward to not paying out that extra £134

Thanks.

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  • Nick_C
    Nick_C Posts: 7,460 Forumite
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    When the interest free period on the CC ends, will you be able to pay it off, or do a BT to another interest free card?

    How much can you overpay each month?

    Normally, the answer would be pay off the debt with the highest level of interest, but although that is currently the loan it may become the CC in due course. You might be better saving the surplus if you have access to a RS account that pays more than 3%.
  • darren_5
    darren_5 Posts: 177 Forumite
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    Nick_C wrote: »
    When the interest free period on the CC ends, will you be able to pay it off, or do a BT to another interest free card?

    How much can you overpay each month?

    Normally, the answer would be pay off the debt with the highest level of interest, but although that is currently the loan it may become the CC in due course. You might be better saving the surplus if you have access to a RS account that pays more than 3%.

    Well I have £4,000 in savings so I was thinking about putting £1k against one of them, and then maybe another £300 from my current account.

    The 0% will end June 2019, and I reckon I can pay around £200 off per month so it would hopefully be cleared by then.
  • Nick_C
    Nick_C Posts: 7,460 Forumite
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    So unless your savings are getting more than 3% interest (very unlikely), pay off the loan.

    If you can be disciplined about it, don't pay any more off your CC than you have to until you get to the end of the interest free period. Put the money in a savings account for now.
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