Do I pay off £7500 loan or credit cards??

EdinburghKev

I am due to recieve a £6700 payout shortly. I wondered if this amount would be best used to pay off a loan with a balance of £7500 or credit cards with a value totaling about £6500.

I pay the following amounts monthly. The amounts in brakets is the interest payed monthly:

£7500 Loan - £250 (£95)
£3400 Credit Card 1 - £150 (£59)
£1700 Credit Card 2 - £42 (£35)
£900 Catalog - £47.00 (£25)
£500 Credit Card- £50.00 (£25)

I shall be closing what ever I pay off so if I pay the credit cards I will be canceling them as well. I have already cut up the cards.

My instict tells me to pay off all the items apart from the loan and continue to pay £250 per month to the loan. My finances are streched each month and the monthly payments saved will be a great help.

nomorespending

Def credit cards as you're paying most interest on them. Get them all cleared and then ( if you can ) make over payments on your loan...
If theres a penalty for making over payments on your loan put the money away you would have paid on your credit cards ( if you were managing up til now you should be able to put the same amount away) and then once you've got enough to pay off the loan and the penalty clear that too.

It will make a massive differnece not paying credit cards anymore - how fab will that be to have them gone!!

EdinburghKev

nomorespending, thanks for the quick reply. I shall do as you suggest and clear all the other bits and pieces and then focus my efforts on the loan.

purpleheather2810

Sounds like a plan to me!