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Which debt to pay first?

RenB21
RenB21 Posts: 33 Forumite
in Debt-free wannabe
Hi guys I had some good luck yesterday and won on the lottery! Not the jackpot but 5 numbers so I'm quite happy!

I could pay off the smallest 2 of my debts saving £140 per month to be split with other creditors and saving £7 a month interest.
Or I could pay off bill number 4 and save £165 a month and £20 interest.

CCCS in the past have told me to pay smallest first so as not to show favouritism.

Any advice gratefully received.

Thanks
«1

Comments

  • babes21
    babes21 Posts: 1,665 Forumite
    I'd pay the one with the highest APR first which seems like debt N0 4.
  • isy1011
    isy1011 Posts: 513 Forumite
    CONGRATULATIONS:rotfl:

    I wont ask how much:D

    So its true people really do win the lottery!

    Pay the ones with highest APR everytime.
    Egg April 10 £6600 Jan £4678 now £0
    Santander Jan £3414 April £3338
    Virgin April£2643 Aug £3155 April £7109
    Barclaycard Oct £1476 April £1287
    So far paid off 17% of c.c. debt:T
  • redpete
    redpete Posts: 4,741 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    Pay the one with the highest APR. I don't understand why paying the smallest is showing any less favouritism than paying the highest APR.
    loose does not rhyme with choose but lose does and is the word you meant to write.
  • ms_london
    ms_london Posts: 2,852 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    RenB21 wrote: »

    CCCS in the past have told me to pay smallest first so as not to show favouritism.

    Surely that is the worst piece of advice in the world??! Should they be allowed to give crap advice like that??!

    Everyone on here will agree to tackle the debt with the highest APR first, 100%!

    Well done on the lottery win by the way, that's great news xx
  • niccatw
    niccatw Posts: 3,096 Forumite
    Part of the Furniture Combo Breaker
    General rule of thumb is, as every-one has already said, pay off the one with the highest APR. It's the one that's costing you the most after all!

    Having said that there are times I've ignored this advice and it's generally when a debt with a lower APR is causing me so much more stress that I just want shot of it!

    Hopefully next week you'll get 6 numbers! ;):D
    Jan10: 28,315.81 Jan11: 18,015.32 Jan12: 7,682.58 Jan13: 2,987.73 Current debt: 1,225.55
    HFC [STRIKE]1896.10. [/STRIKE] 225.55 SLC2 [STRIKE]5123.34[/STRIKE] 0 Others [STRIKE]2085[/STRIKE] 1000 Bcard [STRIKE]1172.60[/STRIKE] 0

    Mike's Mob
  • mcjordi
    mcjordi Posts: 4,238 Forumite
    Part of the Furniture Combo Breaker
    highest APR.. but try full and final settlements first ;)
    Sealed pot challenger # 10
    1v100 £15/300
  • gratefulforhelp_2
    gratefulforhelp_2 Posts: 9,286 Forumite
    Congratulations!
    Please do not confuse me with other gratefulsforhelp. x
  • Hannah_10
    Hannah_10 Posts: 1,774 Forumite
    I fully agree Ms-London, not only is it crap because of that, it's also crap because the smaller the debt the less likely it is to get taken to court if your circumstances change and you can't make payments!

    The sensible advice is pay the most expensive debt first, (highest interest/charges per month, not highest payment value). It is also sensible advice to try your luck with a full & final offer or two. Factsheet here. http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=24_full_and_final_settlement_offers
    I refuse to be afraid of the big bad wolf, spiders, or debt collection agencies; one of them's not real and the other two are powerless without my fear.
    (Ok, one of them is powerless, spiders can be nasty.)

    As of the last count I have cleared     [STRIKE]23.16%[/STRIKE] 22.49% of my debt. :(
  • HappyMJ
    HappyMJ Posts: 21,115 Forumite
    10,000 Posts Combo Breaker
    isy1011 wrote: »
    CONGRATULATIONS:rotfl:

    I wont ask how much:D

    So its true people really do win the lottery!

    Pay the ones with highest APR everytime.
    gratefulforhelp wrote: »
    Congratulations!
    Why? Is gambling the correct route out of debt?
    :footie:
    :p Regular savers earn 6% interest (HSBC, First Direct, M&S) :p Loans cost 2.9% per year (Nationwide) = FREE money. :p
  • Nottoobadyet
    Nottoobadyet Posts: 1,754 Forumite
    Debt-free and Proud!
    How about making F & F offers and hopefully getting them both paid off? I assume you're on a DMP and have defaulted?
    Mortgage free by 30:eek:: £28,000/£100,000
    :DDebt free as of 1 October, 2010:D
    Taking my frugal life on the road!
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