Paying Off Loan

tsmiggy

I have been given a settlement figure to pay off a loan,and i have enough in a isa to pay it off.Being the interest i am getting of my savings is poor,would it make more sense to use the money to clear the loan........... I say Yes................ Wife says no


Help:eek:

CLAPTON

Without the full details, in general it makes no sense to borrow at high(er) interest rates and save at low(er) interest rates

tsmiggy

About £3500 in a ISA,settlement figure of £1663 the loan as 14 months to run,and the APR 6.1%.......... Cost of loan per month £107.09.Should i ignore the wife lol

cheers

Mags_cat

tsmiggy wrote: »

About £3500 in a ISA,settlement figure of £1663 the loan as 14 months to run,and the APR 6.1%.......... Cost of loan per month £107.09.Should i ignore the wife lol

cheers

Is your ISA paying you more than 6.1% interest? (If so, I think we'd all appreciate you telling us who that's with!). If it's paying less than 6.1% it may well make financial sense to pay off the loan. Check the T&C for any penalties. Make sure you're not leaving yourself short inother areas e.g. If the money in the ISA is your emergency fund I personally wouldn't use it all, but remember if you do pay off the loan you could start saving the money you would have used for the loan payments so you should be able to replenish your savings fairly soon.

ViolaLass

Has your wife given a reason for saying no? (She might know something we don't)

tsmiggy

She as not given a reason no lol,but she actually pays the loan out of her bank account.So i am only trying to have a logical approach to this,mind you its taken me a lot of years to have this logical approach.Maybe she thinks i have another motive,but i have not.

Clive_Woody

tsmiggy wrote: »

AShould i ignore the wife lol

Always :beer:

Apples2

It's nice to have a little pot to call upon just in case the worse happens.

If I were you I would pay the loan off but continue to put the £107.09 back into the ISA.

You'll save the 6.1% interest on the loan and even with the reduced ISA total, you will at least be making a mediocre amount on top from the additional money going into the ISA.


Ignore the Wife at your Peril, there is no-one on MSE who can help you with that one.