Best way to use extra money

andys15

Hello DFW

As you can see from my signature below my debt is reducing at an ok pace, but not quick enough. I have just returned from my Holiday which I was putting £550 per month towards. I now want to maximise that £550 towards debt, but not sure who to throw it at.

The options......
Natwest credit card- £6669.50 outstanding,currently pay 2.25% of balance. 0% until 14/7/2011.
Halifax Clarity. Overspent on 2 week holiday by £337.23(not bad, Barbados was very very expensive) 12.9%
Virgin cc £637. 0% till feb. Currently pay £25 permonth.

£14841 will be repaid in 9 months on a loan currently repaying £1534.41. £9500 0% and £5341 @7.9% (goona leave this one to run)

I owe 43 repayments to Tesco of 232.30 or total £10418. This is what I wanted to hit @ 7.9%. i phoned tesco and they said I could overpay, and they charge interest daily, but I would still have to repay £10418, which I dont understand because the interest wasn't front loaded. Should I get a new loan for the £9400 settlement figure fee( plus 2 months interest) and pay it back that way, 12 months instead of 43.

Final alternative, overpay my fixed mortgage, currently 9 months left of 3 years fixed deal. 28 years to run at 5.34%.

The obvious answer is the natwest cc before the 0% runs out, but I can easily transfer that to 0% again once the deal runs out.


Help

andys15

Gosh. it doesn't take long for a new post to drop to the next page.

Thumper7

Hi andy

If it were me i would consider saving your 550 until you have enough to settle your tesco loan in full. There may be savings accounts out there where you might get a semi decent rate.

andys15

I had considered saving it but the temptaion would be there to spend it. If I get a new loan, I would therefore have the money come straight out. I would save about £1000 in interest. I would be getting a new loan once the £1534 is freed up in 9 months to repay the tesco loan anyway.

Thumper7

But what are the chances that you will get as good an interest rate that you have on your loan already? Is it really worth trying to settle a loan with a loan if the interest rate is going to much higher

andys15

I will get it with Tesco again, and as a customer I will get .01% of the existing rate, which will actually make it 7.7% as opposed to the 7.9% it isnow.

Infact the loan is advertized at 7.7%,so I will get it for 7.6%

Thumper7

what will the minimum payments be.

Do you really want to tie up all your money in the loan. You have to consider what happens when your 0% comes to an end. You may or may not be able to get another 0% deal.

LexieLou

I'd save the money in a 30 day notice account and that way you can't touch it on a whim. Get rid of the debt that is costing you the most every month asap. If you put the £550 away every month, in a year you'd be rid of the Tesco loan and then able to fire the money at the CC. God I wish I had an extra £550 a mth and didn't know where to pay off first. Only slightly jealous by the way!

LL xx

MFWannabe

andys15 wrote: »

Hello DFW

As you can see from my signature below my debt is reducing at an ok pace, but not quick enough. I have just returned from my Holiday which I was putting £550 per month towards. I now want to maximise that £550 towards debt, but not sure who to throw it at.

The options......
Natwest credit card- £6669.50 outstanding,currently pay 2.25% of balance. 0% until 14/7/2011.
Halifax Clarity. Overspent on 2 week holiday by £337.23(not bad, Barbados was very very expensive) 12.9%
Virgin cc £637. 0% till feb. Currently pay £25 permonth.

£14841 will be repaid in 9 months on a loan currently repaying £1534.41. £9500 0% and £5341 @7.9% (goona leave this one to run)

I owe 43 repayments to Tesco of 232.30 or total £10418. This is what I wanted to hit @ 7.9%. i phoned tesco and they said I could overpay, and they charge interest daily, but I would still have to repay £10418, which I dont understand because the interest wasn't front loaded. Should I get a new loan for the £9400 settlement figure fee( plus 2 months interest) and pay it back that way, 12 months instead of 43.

Final alternative, overpay my fixed mortgage, currently 9 months left of 3 years fixed deal. 28 years to run at 5.34%.

The obvious answer is the natwest cc before the 0% runs out, but I can easily transfer that to 0% again once the deal runs out.


Help

If it were me i would pay off the Virgin cc and the Halifax card and cancel them so that's 2 out of the way. Then i would plough money into the Tesco and pay that off asap. Then you have one loan and the Natwest credit card left which you could then change to another 0% deal when the time is up