can someone help please?

gemmacots

Hi, I have posted here before, but wondered if someone can help me.
I have come into £5000 and want to clear some of my debt but do not know what is the best thing to clear in order to reduce interest etc..
I have the following debt:

£14300 on a credit card at 15.9% APR
£2060 on a credit card at 15.9% APR
£9500 loan at 17% APR payable over 4 years (£300 per month)

I am organising some transfer balances from other credit cards to have 0% interest on my credit cards for 12 months.
But where should I use the £5000? I was going to pay off the 1st credit card to bring it down to £9300 and then do a balance transfer on the rest, but am wondering if I should pay it off the loan instead as the interest is higher on the loan and I would have a smaller loan?
Credit card or loan? My plan is to increase my monthly payments to clear these once and for all.
Any ideas? thankyou

bottleofred

Hi gemmacots,

What you choose to pay off with the money is up to you really, but if it were me, I'd pay the debt with the highest rate of interest. However, regarding the possibility of getting the £9300 onto a 0% card, I'm not sure you'll get that kind of credit limit initially. I would probably clear the £2300 so I felt as if I'd achieved something and then pay the balance of one of the other debts, but as I said, it really is up to you.

Good luck with whatever you decide

handyman123_2

Hi gemmacots, I've seen similar questions to yours on here recently. Though not my field, I believe the usual answer is to pay of the debt with the highest interest rate first.

I'm sure someone with the right answers will be along soon to advise you.
Cheers, handy.

Orville

gemmacots wrote: »

Hi, I have posted here before, but wondered if someone can help me.
I have come into £5000 and want to clear some of my debt but do not know what is the best thing to clear in order to reduce interest etc..
I have the following debt:

£14300 on a credit card at 15.9% APR
£2060 on a credit card at 15.9% APR
£9500 loan at 17% APR payable over 4 years (£300 per month)

I am organising some transfer balances from other credit cards to have 0% interest on my credit cards for 12 months.
But where should I use the £5000? I was going to pay off the 1st credit card to bring it down to £9300 and then do a balance transfer on the rest, but am wondering if I should pay it off the loan instead as the interest is higher on the loan and I would have a smaller loan?
Credit card or loan? My plan is to increase my monthly payments to clear these once and for all.
Any ideas? thankyou

My advice although maybe wrong would be to pay the lower card off completely and close that down. I'd then use the rest for the other card. I think if you put it all twoards the loan, you might incurr charges for actually paying it off early.

gemmacots

Thanks for your fast replies, I have already been accepted for a balance transfer credit card of £5000 on a 0% card, and I will apply for another one once I have paid off the £5000 so my credit looks better. Still not sure if I should pay off my credit card or loan really. I am going towards the credit card. thanks and will see if anyone else has any more ideas. Can't wait to clear them all and want to do it over the next three years so am on a mission. thanks anyway

chevalier

Hi there
Ref the loan, you may find that there are early redemption penalties if you pay this off early, which may wipe out any interest saved on it. You would need to check with your provider.

As another poster said if you paid off the £2300 card, and closed it down, then you would have less available credit, which might look better when you try and get a balance transfer.

Sorry not to be more helpful, but you need to find out the loan information first. If you can pay off a lump sum without penalty then that is probably the way to go.

You might also want to look at your outgoings so that you can not run up the debt again
chev

gemmacots

thanks, the reason my debt has ran up so high in the first place is because I started a business from scratch and have funded it through credit cards and the loan, maybe not a good move, but now the business is running well, I want to pay it all off. So there is no way I would be looking to run the debt up again, If I would not have started the business this way, I would not have a business as the banks did not want to help fund it. So at least I have managed to pull it off, but now I have to clear these debts. Thanks for your input.

chevalier

Ah I see no worries. It is always a worry with people! Good luck with your business in the future. I hope that you will be able to overpay your debts going forwards.
chev

MFWannabe

gemmacots wrote: »

Hi, I have posted here before, but wondered if someone can help me.
I have come into £5000 and want to clear some of my debt but do not know what is the best thing to clear in order to reduce interest etc..
I have the following debt:

£14300 on a credit card at 15.9% APR
£2060 on a credit card at 15.9% APR
£9500 loan at 17% APR payable over 4 years (£300 per month)

I am organising some transfer balances from other credit cards to have 0% interest on my credit cards for 12 months.
But where should I use the £5000? I was going to pay off the 1st credit card to bring it down to £9300 and then do a balance transfer on the rest, but am wondering if I should pay it off the loan instead as the interest is higher on the loan and I would have a smaller loan?
Credit card or loan? My plan is to increase my monthly payments to clear these once and for all.
Any ideas? thankyou

Hi
I would pay off the second credit card in full and close the account; this will look better in the future when you apply for another 0% card. Then i would pay what i had left off the first card.
Although the loan is slightly higher interest it is a fixed monthly payment for a fixed amount of time. How long it takes to pay off Credit cards is always dependent on how much you pay off them each month.
Hope this helps and good luck towards acheiving a debt free future

gemmacots

Hi thanks for the replies, does anyone on the forum have financial knowledge as to which would be the best way to go? thankyou