Opinions please - cunning plan?

youngandreckless

Hi All,

I hope you can advise, I'm trying to work out the quickest way to get out of my debt and although its not going up, its not exactly going fast either.
I've got an ISA with approx 2 grand in it for paying off my loan early, but I'm now wondering whether I should use it to get rid of the credit card I have and then re-finance the loan to pay over the next two years (which is the lowest period cahoot do) at £309.15 a month.
My debt free date is at least 3 years away at the moment and to be honest I'm utterly sick of this endless cycle of debt that I'm stuck on. My friend is keen for us to go travelling while we're still young, free and single and I'd love to - but alas I'm not free, my debt is keeping me chained to my frankly rather mundane existence.
So aside from a lottery win, this seems the quickest way to get shot of my debt.
I also figure that once the loan is down to a decent amount, I could switch it to a 0% card and (payrise permitting) then throw even more money at it to cut the time I have to pay it off.
As reassuring as the ISA is, it seems sensible to save like mad once I'm debt free, rather than the slightly odd situation I'm in now - what do you think?

Willsnarf1983

didn't u only just get the loan refinanced?

If it were me i would use £1500 of the Isa and save 500 for emergencies.

Unfortuantly ur friend has put ideas of fleet and fancy and you want to get out of debt the quickest way possible(don't we all ) but you could end up putting a greater pressure on urself.

get another job? sell some more stuff? Less nights out?

Will

citygal

You can always travel! India/Peru/Thailand or wherever you want to go isn't going anywhere! You have to pay your debts first- would you rather travel worried? or with a peace of mind? I think you shoukld use some or all of your ISA to pay off your debts then you can do whatever you like....I'm in the same boat- was hoping to go travelling round Africa- but then I thought about it realistically and decided to pay off debts first:( It hurts and will be a pain now, but you'll feel better later

dinkylou

I know how you feel as I too would like to go travelling but maybe you would feel more refreshed and wont break the bank if you take a shorter, cheaper break.

You will still be able to travel further later.

ceegee

Sorry to sound like a boring old git, but unless you are very rich, you cannot have every material thing that you want! For goodness sake (I'm old enough to be blunt :snow_laug ) get rid of your debts before you even consider a holiday. How would you feel if you went away and then came back to an even larger debt?

I wonder if you really do want to get out of debt or if you are just saying it............

Do you have a sensible budget that you stick to? It has to be sensible or it won't work. It's just that you don't really seem to be on top of things yet and I wonder how committed you really are. It's the start of a new year.....make a concerted effort to get on top of things this year.

ms_london

I completely understand where you are coming from. When my debt was just down to my loan I considered going travelling but making sure that a year's repayments were in my account so that I could cover my repayments whilst I was away. This meant I would have had to saved £2,158.56 before going anyway, and then save for my trip away. I decided against it, because, what if I wanted to stay away for longer than 12 months?? I would have to get back to repay my loan. What if I wanted to stay in a country that I fell in love with, perhaps permanently? Again, I couldnt, because I would have to get back for my loan. Did I really want to get back to a £10,000 loan after the trip of a lifetime??

In the end I decided not to. It was tough, and when I was saving the money in my ISA, every day I felt like withdrawing the money & instead of putting into my loan, just leaving and going travelling, but I didnt..

It might seem a long way off, but see your travelling as a reward for all of your hard work now. You can then properly enjoy it & not have the burden of your debt waiting for you when you get back, and you can spend money knowing that it is yours to spend..

Could your debt be cleared sooner than 3 years? Perhaps its worth reviewing your SOA again?? You are only young and time is on your side. You'll get there in the end & it will be SO worth it in the end.

Ms_London

skintchick

I would also use £1500 of your ISA to pay debt and have £500 for emergencies, and leave travelling till you are debt-free.

youngandreckless

Maybe my post wasn't clear but I wasn't actually suggesting going travelling until my debt is gone - hence my renewed vigour to get rid of it quicker! Going travelling while in debt isn't an option for all the reasons stated above, so thats why I'm trying to get it gone sooner rather than later.
I did refinance the loan, but was considering doing it again to shorten the term and up the payments - not to borrow more money or consolidate as this blatantly doesn't work. While I'm paying off the c/card I have my loan over 4 yrs at a measly £134.19 a month, so I guess what I'm thinking is that by using the ISA I can shift the £150 c/card payments to the loan and shorten the term at the same time.
A second job isn't an option as I'm at college re-training part time, which would be finished in aprox 18 months time - another motivation to lose the debt....

Willsnarf1983

i presume u just can't over pay the loan can u?

Will

youngandreckless

Not with the loan as it currently stands although I'm not adverse to looking around for a flexible loan. I just worry about my discipline to actually overpay -fixed rate takes it out of my hands so to speak, but its a good idea and I will certainly look into it, any idea what the flexi loan rates are like? My current loan is 5.8% which is pretty much the lowest I qualified for on the sites I checked

youngandreckless

An update to current situation. I've contacted my ISA people and I'm waiting for a statement to let me know exactly how much I have. Unfortunately it appears that I may be too early to get at it and will be penalised for taking the cash now - I'm awaiting all the paperwork to know exactly what the score is and what kind of penalty it is. All very confusing.
Also given up smoking and due to a very bad chest infection and hospitalised close relative I haven't been out or spent hardly and cash for two weeks now. I suppose I should be grateful for something positive out of it all!