To clear or not!

adamc260

Ok so I have an ongoing car finance with Blackhorse

The amount of credit is £2574 and the 'total charge for credit' is £556.49 so that would be a total amount of £3130.49 to clear

The agreement is one payment of £230.73 followed by 11 payments of £230.73 and one final payment of £361.73

So far i've paid 4 payments

The settlement figure I have been given is £1999.12 if received before 17th January

I have a few thousand in my savings and I'm wondering... am I better paying the finance off and starting my savings again... or keeping this finance going and building my savings up at the same time. It won't wipe me out entirely if i clear it, i'll have... give or take almost a grand left. My savings are currently in an account only making about 2.5%

I'm quite sensible with me money, even now I'm saving about £250-300 a month (of a wage that fluctuates between £950-£1200 a month) whilst paying rent, mobile phone etc etc. No other outstanding debt

Giraff

If you can afford to re-save then id pay it off personally.

ellesbellesxxx

I would too!

Tixy

Hi Adam

I'd say clear it as well. If you keep paying for the next 8months you'll be paying £2207, but the £1999 is only going to earn you around £35 in interest in that same time. So you'll be up quite a bit.

If you can pay it off now and then save £500 a month (the current amount you save plus the extra £230) then in 4months you'll have your savings back to the current level.

The only reason it might not be sensible to clear it is if you are thinking of making another large purchase in the next year, but assuming you are just planning to accumulate your savings for the next year then may as well pay it off to get the most from your money.

adamc260

Thanks all. Thats what I was thinking as I'll be paying more interest on the finance than I'd gain on my savings.. And nope no large purchases That ones big enough!

adamc260

All clear Paid it off, nice feeling! Can start 2011 fresh now debt free

MFWannabe

and how great does that feel???!!!!!:beer:

adamc260

FREEZ wrote: »

and how great does that feel???!!!!!:beer:

Very... VERY nice Its wiped out a lot of me savings but I know in the long run its worth it and I can save the extra money now and start saving properly for a deposit for a mortgage

Takingcontrol_2

Giraff wrote: »

If you can afford to re-save then id pay it off personally.

I agree! Clear the debt

themull1

I agree too!