Halfway through Cheap Loan with Spare Cash to Repay

jimbojetset

Hello, this is my first post and I would appreciate any advice.

I have been living very frugally in order to clear my debts and I now theoretically have some surplus cash - I have not been saving over the last few months but paying off large amounts of debt instead.

Final Debts

£1600 Credit Card Balance (25% Apr) ~£33 per month minimum
£139 per month for loan repayment (£11,000 over 10 years at 9.4% Apr, halfway through). Not sure of settlement figure, but probably £5000 I would daresay, as I have paid out over £8k so far.

Available

£1500 Cash in bank
£500 theoretical 'surplus' after key outgoings

I don't want to keep on paying the loan interest for another 5 years, although it is quite inexpensive debt compared to the cards I have had in the past. Should I use all the spare cash to clear the final chunk of credit card debt or use it to pay off some of the outstanding balance on the loan (which only reduces the term according to the small print)? Is it worth increasing the repayments on the loan, or even trying to refinance it?

Many thanks

ellesbellesxxx

I would personally repay the credit card as this has the largest APR!! Then you don't need to worry about it. Am not so clued up on loans though but am sure someonen can advise soon
Well done for savings!

CHR15

No brainer - Clear the Credit Card (and then chop the thing in half)

You need to see if the Loan allows overpayments, if not, stash the extra cash into a savings account until you have enough to settle the loan once and for all.

Congratulations on what you have done so far.... Good luck

jimbojetset

Thanks for the advice, it is reassuring. I will maybe keep the card for a rainy day, but locked away. The debt was all generated on bad cars & repairs, holidays and debt incurred between jobs, so I will be glad to see the back of it all.

Blobby8_2

So if you pay off your credit card and the loan cannot be paid off early, you will be saving £500 on a good month? If so in three months you will have a £1500 buffer, growing monthly - hence you can cut up the credit card as this time next year you should have around £5k savings