What would you do?

tigerfeet2006

I've just been juggling finances around and it looks like I will have an extra £10 a week free that I want to put into the credit union. At the moment we have a loan with them which will be paid off in Feb 2011. I pay £20 per week to the loan and £5 towards savings.

Now do I
A) put £5 extra into saving and £5 extra to pay off loan.
put it all into paying off the loan
C) put it all into savings.

I am leaning towards A though I know that I should probably go for B. My DH thinks C.

So what do you lovely lot think I should do?

Fortheloveofmoney

I don't know your circumstances but I would put it into the debt with the highest APR.

tigerfeet2006

At the moment the CU loan is my only debt at 12% APR.

Fortheloveofmoney

Oh I see. Have you worked out how much earlier your debt free date will be with the extra £10? Do they charge anything for overpaying?

What would the savings be for?

So_Sad_Angel

Hi Tiger:wave:

I`d definately go with B - pay all excess into paying off loan . You are already saving £5 a week anyway so that will still be building for emergencies. Extra £10 a week could knock 6 months off the loan term. When its paid you can put everything into saving & build that up very quickly.

Just my thoughts of course....also I guess it depends if there is something in particular you need to save for too.

Angex

tigerfeet2006

Fortheloveofmoney wrote: »

Oh I see. Have you worked out how much earlier your debt free date will be with the extra £10? Do they charge anything for overpaying?

What would the savings be for?

About 6 months, no they don't charge for overpaying.

Looking to take DC to Euro Disney the year after next. Going camping through France and thought we would camp there and go and meet Micky Mouse Would love to do it next year but we won't be able to afford it.

So_Sad_Angel wrote: »

Hi Tiger:wave:

I`d definately go with B - pay all excess into paying off loan . You are already saving £5 a week anyway so that will still be building for emergencies. Extra £10 a week could knock 6 months off the loan term. When its paid you can put everything into saving & build that up very quickly.

Just my thoughts of course....also I guess it depends if there is something in particular you need to save for too.

Angex

Hello Angel sweetie :wave:

Thank you for that, think that is the way to go you know. I know it is the right thing to do really but part of me likes having the saving

Fortheloveofmoney

Well you could still go. If you pay off the debt 6 months early, use the whole amount you would have paid, around £120 per month I guess, to put in to savings. By the end of the 6 months you'll have £720 plus interest earned. You'll actually be better off by at least £30 by paying it off the debts and you'll still get your treat.

It also means you'll be debt free in 9 months so the final count down begins......

tigerfeet2006

Thank you for working that out for me Fortheloveofmoney, hadn't thought of it like that.

Well that's it decided then

Cheers both for letting me brainstorm on this, it's really helped.

I've also just had a D'oh moment. We had over £500 in savings when we took the loan out and for some reason I was thinking they would put it towards the loan, don't ask me why . So of course I will have that to put towards it as well. Some one kick me :rotfl:

dancingfairy

Wow you could be debt free really soon then - just a couple of months if you put that 500 towards it? or have you already counted the 500 pounds? I am a bit confused?
df

tigerfeet2006

Nope haven't counted the £500 towards it. With a CU account they encourage you to have the savings there and when you take a loan out with them part of the money you pay goes into savings, which I love and it is low interest on the loan as well

Fortheloveofmoney

tigerfeet2006 wrote: »

Thank you for working that out for me Fortheloveofmoney, hadn't thought of it like that.

Well that's it decided then

Cheers both for letting me brainstorm on this, it's really helped.

I've also just had a D'oh moment. We had over £500 in savings when we took the loan out and for some reason I was thinking they would put it towards the loan, don't ask me why . So of course I will have that to put towards it as well. Some one kick me :rotfl:

You're welcome, happy to help.

Gentle kick.....