Some Advice Please

paulmarks83

Hi there, I’ve not ever started a thread before so please bear with me.

I’ve been reading this site for a while now and have followed all the advice. I’ve got £3000 on a flexible repayment egg loan (7.9% APR), and £4000 on a capital one card. (The one with amazing 3% APR life of balance rates with nothing else ever charged to it)

Every month I transfer the majority of my surplus cash (on top of minimum payments) to the egg loan as it’s the largest APR and leave the capital one alone.

Anyway, my point is last year I was mugged and stabbed on the way home. (For the sake of £10 in change). :eek:

About 2 weeks ago I received a compensation payment from the Criminal Injuries Compensation Authority of £1000. :T I’ve put this into an ISA @ 5.2% and left it there for the time being. I realise that it would probably be a good idea to pay this off the flexi loan but I’ve got it into my head that if I leave it where it is, on the day its all over, not only will I be debt free, but I’m also going to have a nice nest egg to start me on the road to savings and pensions.

Does this make sense? Am I doing the right thing?

Thank you, for your advice.

Xbigman

The standard answer I would give is that you should use that money to pay off your debts. You will pay them off earlier and it will cost you less interest. That is what I would do.

Individual circumstances could make a difference and anything short of spending it is not bad.
Regards



X

hobo28

Does this make sense? Am I doing the right thing?

Strictly speaking No, it doesn't make sense as Xbigman says, you will pay your debts off earlier if you use it to pay off your debts.

That said, an incentive is a powerful tool so if you can resist the temptation to splurge then like you say, its nice to have something to look forward to when you are debt free.

Gillby1

paulmarks83 wrote:

Anyway, my point is last year I was mugged and stabbed on the way home. (For the sake of £10 in change). :eek:

That's terrible! I'm really sorry such an awful thing happened to you, and i hope you are fully recovered, paulmarks83.

I understand about wanting to have the £1000 in the bank. It feels nice knowing you have some actual money sitting in a savings account, but it just isn't worth keeping the savings in an account where it accrues less interest than the interest you are paying on your loan and Credit Card.

But i think you knew that already That's why you posted - you just wanted us to talk you into it!

Good luck, whatever you decide x

Gills