Advice needed what to pay off

guns4

Hi, I have been struggling with my debt for a few years now and I have managed to get it down £10k from £30k to £20k via loan payments really. But i have recieved a good bonus from work.

I would like to treat myself for my good work and my wife for her support but what should I pay off

Credit card 1 £3200 18.9%
Credit card 2 £1475 23.9%
Credit Card 3 £1950 25.9%
Loan 1 £7700 6.9% 4 years to go
Loan 2 £4318.02 9.9% 20 months to go
Overdraft £1500

what should I pay off?

Tixy

How much can you afford to pay in a lump sum? I would go for the highest rate debt - so credit card 3.
Once that card is clear in a couple of months you might want to see if they will offer you any promo BT deals as an existing customer - if they would you could then BT one of the other cards to that account.

bottleofred

Hi guns4,

Totally agree with Tixy. Always pay off the most expensive debt first.

Good luck

Red

CH27

How much is the lump sum you have available?

Always pay the most expensive debt first which in card 3.
You can then move onto the next card.

elaine12022

Another way of prioritising is to divide each debt by the minimum payment, and the one with the smallest number you pay off first (and then add any payments from that onto the next one and so on).

congratulations on the bonus, I agree nice to treat yourselves as well as reducing the debt load a bit!

[Deleted User]

This is the order that you should pay them off in order to minimise the amout of interest repayed. Also, take Tixy's advice about Balance Transfers to lower or 0% cards in a few months.

Credit Card 3 £1950 25.9%
Credit card 2 £1475 23.9%
Credit card 1 £3200 18.9%
Loan 2 £4318.02 9.9% 20 months to go
Loan 1 £7700 6.9% 4 years to go

Overdraft £1500 (How much are you being charged for this?)

bargainbetty

You could also look at the current balance transfer offers each of your card providers is offering. If by clearing the second most expensive card, you could then transfer the whole balance of the first card over and reduce the interest to 0% for a year, or get a low life of balance card, that might save you a bit more in the long run.

Would you be likely to get offered balance transfers? Might be worth a call to the providers to find out.