Advice / guidance required on debts

Met77

Okay, at present I have two loans, both for cars, one for me and one for my girlfriend. Both loans are with Barclays. I am relatively new to this site but I have come up ith a way to manage this debt and would like some other opinions on the method.:j

Loan 1: £2000 over 24mths, taken out Oct 09, APR 17.9%, 18mths remaining, early settlement would be in the region of £1590.

Loan 2: £5000 over 36mths, taken out Oct 08, APR 15.4%, 18mths remaining, early settlement would be in the region of £2810.

Total Settlement: £4400.

Total to be paid if loan was to be kept: 1 £1782 & 2 £3114. (Total 4896).

If I paid the loans off now I think I would save approx. £500 in interest.


I have £3600 in an ISA, with a further £1400, waiting to go in after April 5th.


My idea was to clear the two loans using a 15mth 0% Barclaycard. Use the £1400 I had ready for the ISA to pay off part of the Barclaycard debt, reducing the balance to £3000, which I intend to pay off over the remaining 9 months of this year at £333/mth.

Is this the best method or are there any other better methods. Also I dont understand the Barclaycard 2.9% fee, is this applied to the £4400 (i.e. £127.60)?

Thankyou for any help / guidance you can offer.

Steven

Tixy

Hi Steven

I'm not sure if you can balance transfer from a barclaycard to clear your loans. Usually you need a super transfer card to transfer cash to your current account and then pay off the loans from there. And I don't think barclaycard is a super balance transfer card.
Do you already have a barclaycard or were you going to apply for 1?

If you are going to apply for a new one then £3k is quite a high starting credit limit - obviously don't know your salary and details of any other debts or your credit rating but you might struggle to get one with this limit.

By the way if you are planning on doing this it would make sense to only transfer the £3k to the card not the £4400 (as it will cost less in fees).

If you don't get the card would you consider cashing in the existing ISA to pay off both the debts? This will save you far more in interest than you will earn in the ISA. And once the debts are clear you can then start paying into a new ISA in the new tax year.