Which debts to pay off first

blued

I've just had a read through 'should I pay off my student loan' and 'should I pay off my mortgage' and just want to know if what I have planned sounds ok.

I have the following debts

2yrs 0% finance (£125 pm last payment December)
Credit Card - £2.2k (0% ending on the 30th November)
Mortgage - £87k (5yr fixed at 5.29% from April this year)

I'm paying about £60pm to the student loan. There's about £2.5k left on this I believe. With rumours about inflation becoming deflation I think this should be the last debt I pay off as the interest rate could be reduced significantly in April?

If all goes well I'll be transferred on to an Abbey credit card (no fees) with 6 months interest free so that takes care of the credit card in the short term. I'd like to pay this off (using some existing savings and what I can save between now and then) when the 6 months are up and have no credit card debt whatsoever. I know its cheaper than the student loan but its short term.

So this brings me to over paying on the mortgage. I plan to use the £125 I have free from January to over pay the mortgage. The minimum I can over pay is £200 per month so if I can afford to add £75 per month I will, otherwise I'll pay £250 every 2 months. I'm quite keen to do this though as at my current rate paying £200 per month reduces my term by nearly 10 years!

Does this sound like a reasonable plan?

Jesthar

Sounds like a good plan to me! The money you will save on your mortgage interest will be pretty significant.

Yes, leave the student loan till last, as this will always garner less interest than the rate of inflation, and it will be paid off over time anyway. My student loan is the only genuine 'debt' I have, and I'm just letting it come out of my pay packet. It annoys me to an extent, but until I can't get savings at a higher interest rate than the student loan, they can whistle for it, especially after they stuffed me around and failed to take repayments for about four years... :mad:

If you don't clear your Abbey card within the six months, then there's no need to be too worried I'd say - you can always see about transferring it elsewhere, to another 0%/low interest deal of you can. And don't forget the minimum payments will have knocked a nice chunk off the balance by then, too.

~Jes

Hollypear

Hi
I just got a call from company xxx. They were asking about 1 of my credit cards saying "Is it true you owe £xxxx." Now she said they could nesure I didn't have to pay it back.

Who are these people. I went ballistic and told her she could be Minnie Mouse for all I know and I don't disclose or discuss personal information esp financial information to some stranger on the phone.

Since these days there always seem to be lost info on databases popping up all over the place I am concerned who knows what about me.

Has anyone else had a call like this? Is this as I suspect one of these loan consolidation companies.

I feel a bit guilty being so rude to her and have probably ruined her day. She is probably like most of us trying to earn a living. Am I being paranoid.?

Jesthar

Hollypear wrote: »

I feel a bit guilty being so rude to her and have probably ruined her day. She is probably like most of us trying to earn a living. Am I being paranoid.?

:rotfl: I wouldn't worry, she will have been working for a company trying to get you to pay them significant amounts of money to do things you can do yourself for free! It has been scientifically proven that these people generally have no conscience whatsoever, so you needn't feel too bad about letting rip at them.

I had a call from a similar outfit calling themselves 'Consumer Credit Advice', which I was rather surprised about as I don't have any credit card debt! :rolleyes:

~Jes

Hollypear

Jesthar wrote: »

:rotfl: I wouldn't worry, she will have been working for a company trying to get you to pay them significant amounts of money to do things you can do yourself for free! It has been scientifically proven that these people generally have no conscience whatsoever, so you needn't feel too bad about letting rip at them.

I had a call from a similar outfit calling themselves 'Consumer Credit Advice', which I was rather surprised about as I don't have any credit card debt! :rolleyes:

~Jes

Thanks for that. I don't feel so guilty now. Funny thing I noted their phone number on my phone's call log. When you ring their number you get a "cannot connect your call" message.