payoff loan with redundancy?

pablo_uk

Hey all,

Unfortunately I am being made redundant, but I am confident of getting another job.

My main issue is that I have a large loan and I am considering paying it off with my redundancy money IF I have another job, paying a salary around what I have now.

Is this the best thing to do? or should I invest?

rugbychick81

I would say that it depends on your personal circumstances ... Do you have a mortgage? Are you confident in the security of new work? etc.

I was made redundant just before xmas and used the money to pay of a debt. This means I have £100 less to pay out each month which allowed me to take a job on lower salary but maintain the same standard of living.

However, if I didn't have the security of my parents support if I ever need it, I would probably have kept the money as an emergency fund...

pablo_uk

True that, I was going to wait until I was in the new job for atleast 3 months. If I pay off my debt I have £500 less outgoing (yes its a large loan).

No job is secure these days, I have no-one who could help me out apart from insurances. Although I have worked it out, if I pay off my loan I could take a job at minimum wage (not that I want to). But I could survive, and I do mean survive, on minimum wage.

rugbychick81

If I was you I would keep a two/three month emergency fund and if there was any left then put towards loans.

I know the general line is 'pay off debts before saving' but if you are made redundant again within two years then you are not entitled another pay out and also are probably not entitled to sick pay etc for first few months in the new job.

pablo_uk

Thank you Ellie for your experience.

I do understand that it maybe difficult, I have several plans in place if things don't go to plan. An old proverb is "Prepare for the worst, hope for the best" comes to mind.

If I am unfortunate to find a job before my leaving date, I will have enough money to live as I am just now for 14months and I could stretch it out a couple of more by cutting back on a few things.

Thanks for the advice, its a difficult time. I understand I am not the only one going through this. But I know I can get through it!