£8k bonus.....but who to pay off??

Smashbutt

Hi all

My Dad has kindly lent me £8,000 to pay of my John Lewis credit card.
However I also have an £8,000 Natwest overdraft.

JL charge me about £120 per month on interest and the OD is about £100.

So now I have a decision to make, do I :

A) clear the card
b) clear the OD
c) divvy it up 4K each

JL is on a DD of about £270 a month, so some is paid of the balance.
But I do not pay anything off the OD.
I am paying back the old man at £250 per month.

Any thoughts??

Thanks

Steve

Tixy

Steve

Do you know the APRs for each?
And are you in your overdraft all the way through the month? Is it your main current account?

rubydoiwannabee

Hi, I may have misread or misunderstood but surely it has to be the JL card. If you pay off the OD, you will have to still pay JL the £270 monthly and then also pay your Dad £250? Isn't this paying out more monthly than you are now?

Burlesque_Babe

pay off JL card, then pay back your Dad. Any little bits of money you can save from trimming you budget (pop up a statement of affairs), use to chip away at reducing the overdraft each month whilst paying off your dad. Even the £20 a month difference between paying JL and your Dad will help get the overdraft down.

redpete

From your figures if you pay the CC you'll save yourself £120 interest per month, if you pay the OD you'll save yourself only £100 interest per month - so pay off the one that saves you most money.

You'll end up £20 better off a month (you were paying £270 to JL, now you're paying £250 to your dad) - use this £20 to start paying off your overdraft.

HellsGranny

If you pay it into your account the bank will take the overdraft, leaving you less to pay the others with.

Smashbutt

Hi guys

Thanks for all your replies.

I'll send it to JL, and work on the OD.
My plan is that any money left at the end of month I will lower the OD by.

Thanks again!

Steve