Good or bad idea?

Mar-tan

Hello everyone,

After 7 years of trying to become debt free I am almost there! I have one unsecured loan for £1500 at 10.9% left to clear.

I have managed to clear my overdraft of £2500, which was the hardest debt to clear. My question is this, should i pay off my remaining loan with my overdraft which is interest free?

it seems like the smartest thing to do, however should you have an overdraft as back up incase of emergencies? i have a guaranteed income to rely on for the next year, and if my loan is paid there are no other debts left to pay off so all income can be thrown at the overdraft.

Good or bad idea? or should i just let the loan run to the end of its term?

Thanks in advance for any help/suggestions!:)

podperson

Have you checked with the loan about whether there would be any penalties for paying it off early? If not, or they are smaller then the interest you would be paying, then yes would seem sensible to move it onto the overdraft. Would suggest keeping the overdraft separate to your main bank account though and treat it like a debt where you are paying x amount every month to it, helps with the tempation to dip into it (which is why I'm not allowed one anymore ) You would still have some left over on it as well in case of emergencies.