Loan Advice Needed - how to pay it off the quickest?

CJ2512

Hi

I have a loan which has another 4 yrs left but want to get it paid asap as we are getting a house and don't want to tie this into a mortgage. I recently had a settlement figure which was around £8500.00, would you advise to concentrate on saving up and pay in one lump sum because i can't make over payments, or should i do a balance transfer onto a credit card (£5K) and save the rest (£3500.00 approx)

Just looking for the quickest and most effective solution?

Thanx

immoral_angeluk

Unless your interest rate on the credit card is lower then you'll end up paying more by transferring it to a credit card. Your best option is to either save up and pay it off in one lump sum, or transfer it onto a 0% card and then pay it off before the 0% offer expires, or onto a card with lower interest than your loan.

CLAPTON

i dont really understand your rush to pay the loan off nor how transferring the loan (part) to a CC counts as paying it off. i would have thought that paying the least interest was a worthwhile goal unless there is some specific reason why not.

Storm

How long is it likely to take you to save up the £8500? If you can get it in a high interest savers account you will be able to get a good interest rate on it too.

Putting it on the CC doesn't seem the best idea to me as the interest will be huge on that, have you even got enough room on your CCs?

Try snowballing the options at https://www.whatsthecost.com to see what will be the most cost-effective way in the long run.

My personal advice however would be to concentrate on clearing the CC first, then start saving for the loan settlement in full.

In_Search_Of_Me

This is a tricky one that I've experience myself (alas with 2 loans!)...you need to check whether the loan is "front loaded" (interest paid up front). If so I realised that for me it would not be worth paying the loan off unless I somehow come into about 20000 as the interest is effectively paid on the loan while transferring to new loan or cc would incurr more interest...I'd be really interested in alternative views though but having investgated myself the only solution was to pay the loan off in full by saving (years away in my case) or just carry on until its paid off...sorry ..bit deressing isnt it eh? At least I've learned a lesson but as usual the hard way! Dont tell you that in the adverts do they eh!!

immoral_angeluk

I'm no good with loans.. but hope you get it sorted soon!