Quick help required

Paramuppet

Hi all. Im a newbie to all this and need some help so please be kind! I currently have 3 unsecured loans and 1 credit card and need to clear some debt. I have only one asset, a £10,000 car.

I have applied for settlement figures for all loans and have had the following figures back -

HSBC - £8992.00*
HFC/Benefical - £5043.64
HFC/Benefical - £925.93
HSBC Credit card - 1,859

*- Joint loan with Ex wife. Paying it off as part of the Devorce.

All loans have about 18 months left to run.

Now i am going to sell car and use it to clear some of this debt. Only issue being i NEED a car and want to release the ex wife from the joint loan asap.

Question is .. which one do i clear first??

please feel free to ask any questions/flame me as required?!!!

thanks

Martin

Tixy

Hi Martin

What is the APR and payment terms for each of the debts? Ideally you might choose to clear the one with the highest APR first. But in your case maybe you could clear the joint loan and then buy a cheap runaround with the remainder. Then you could use the money you were paying on the joint loan each month to make extra payments on the debt with the highest APR (if the loans allow overpayments, if not then the credit card.)

Paramuppet

Im at work at min (paramedic). So apr ect are very very vague .. but if i think on APR on HFC are something stupid like 28%+ and HBSC Joint loan is resonable at something like 10% or something .. sorry again for the vagueness .. (Is that even a word????)

I pay £419.52 o a month on Joint loan, £267.15 pcm on 2nd loan and £96.94 on lower loan. I also only pay basic on credit card of £59.00. (i am in throws of sorting this into a S/O)

Large joint loans completes in 2012, smallest loan completes jan 2011.

I forgot to mention, sorry bit busy lol, that my partner has recently lost her job so im now the sole bread winner (she used to pay the bill other than rent) so i am having to pick up the tab for that one too and already have slipped in the arrears with stuff (Countil tax ect).

I know there are no quick fixes but if i can start by clearing something, maybe the rest will follow. I have tightened everything up i can for now. still some BIG improvements to go!

Thanks for your help so far!

Tixy

Its a tough decision - do look out the APR when you have more time.
Again even though the big loan may be the cheapest you also want to consider how much it will free up each month.

If you clear the other 3debts you'll stop monthly payments of around £423. Plus leave you with £2173 to buy a new car and pay off any priority debts (like council tax, very important to pay).
If you pay off the big loan then you'll save a similar monthly amount of £419, but pay more interest in the log run because of the higher APRs on the debts left and have less to sort out your arrears and a new car.

Might be worth looking at a statment of affairs calc (as I say its important to catch up on priority debts ASAP) and then the subsequent snowball calculator when you have a bit more time - see here http://www.makesenseofcards.com/soacalc.html
and here http://www.makesenseofcards.com/snowcalc.html

Paramuppet

Thats what i thought. I had toyed with paying big loan first, saving 2 monthly installments of 419.00 and using this to pay of the smaller loan leaving me with only 1 loan and HSBC Gold card left to sort??? Is this going to be such a good idea????

o by the way ....... :beer: