What to pay off first?!?

79jonesy · 1 February 2011 at 6:20PM

Hi,

I have £6185 left on a loan which I pay £315 pm for (7.9% APR) and £6752 on a Virgin credit card with an monthly rate of 1.2408%.

I want to try and reduce the loan and credit card as quickly as possible.

I have about £2000 available to pay immediately and then about £1500pm after that.
Should I -
A) focus on paying off the credit card first?

focus on paying off the loan first and then put the extra £315pm towards the credit card payments as well as the £1500pm?
C) pay the £2000 onto the loan and transfer the remaining balance to the card (1.2408% plus 3% transfer fee) and then pay it all off from there?
D) Other ideas?!?!?

I don't think I'll get a balance transfer card of 0% but will give it a try. Hence the GCSE Maths style options above!!!!

Thanks for your help.

Tixy · 1 February 2011 at 6:30PM

The virgin card is much more expensive (its nearly 16% APR), so pay off any extra you have to the virgin card until its all gone. After that you could then start overpaying the loan each month if you wanted - or save up a lump sum to pay off the loan in full.

MFWannabe · 1 February 2011 at 8:12PM

Pay off the credit card first; when you have paid this off Virgin are usually good for 0% offers which will allow you to balance transfer some money into your bank to pay off your loan (as it allows super balance transfers); if you wanted to do that