Paying off loan

jamesarpc

Hi Guys...

Wonder if I can pick your brains.
I have a £7500 personal loan that's the bane of my life.
(£267 a month until November 2013 !).
It is the soul reason I am 27 years old and unable to move out of my folks house since I earn little over £1000 a month as a trainee journo and sped hundreds on petrol, car insurance, a credit card etc).

I have recently be given £5000 which I have stashed away for when I need it. This money doesn't earn any interest.
My girlfriend says I should sit on this money until we need it for a wedding or house etc.
I think it should be used to pay off a chunk of the debt so I can move out / save or just feel less pressure.

My questions are thus:
1) Should I pay off the debt or save it for those inevitable events?
2) What's the best way to pay this off? Get a 2500 loan at a smaller interest rate, add it to the 5000 and pay it all off, pay a chunk off the loan which reduces the payment term but continue to pay it as I am or is there a better way of maximizing this opportunity?


I would appreciate anyone's opinion or help.
Please note on my last post I got several replies commenting on spelling and syntax...this is a waste of everyone's time so if there are any errors in the above text...get a life and don't worry about it. :money:

bengalknights

Whats the charge for settling the loan early?

Might be easier to just pay a chunk off as this would reduce the amount of interest you would pay if its a flexible loan as taking out a smaller loan would most likely have a higher rate of interest.

KingElvis

Never take loans to pay loans, I would use your cash to settle as it (should) save you money.

Ask your gf what's the point of moving into a house in debt up to you eyeballs?

chalkie99

jamesarpc wrote: »

(£267 a month until November 2013 !).
It is the soul reason I am 27 years old and unable to move out of my folks house since I earn little over £1000 a month as a trainee journo and sped hundreds on petrol, car insurance, a credit card etc).

It isn't really if you are honest with yourself.

£267 a month isn't going to be enough to get your own place and pay all the bills.

By the way if you think it is the soul reason rather than the sole reason then journalism isn't going to be a great earner for you.

jamesarpc

read above my comments about spelling you pedant.
Im genuinely asking for advice and you are just being a craggy !!!

jamesarpc

Plus the additional £267 a month would allow me to move closer to work and reduce my £220 a month fuel bill so yes it would.
Sensible suggestions only please as this is a complicated issue.
I have £5000 to put towards loan, what's the best way of making up the rest...save for it? cheap rate loan?

STOP COMMENTING ON SPELLING

chalkie99

jamesarpc wrote: »

read above my comments about spelling you pedant.
Im genuinely asking for advice and you are just being a craggy !!!

You are far too immature to live on your own even if you could afford it, which you cannot on such low wages.

Forget the journalism dream and get some anger management training.

Fiddlestick

jamesarpc wrote: »

My girlfriend says I should sit on this money until we need it for a wedding or house etc.

She would say that, wouldn't she - it's neither her money nor her debt!

Use the money to pay off a large chunk of your loan and afterwords, each subsequent payment will go further due to less interest (as the principal is smaller).

Apples2

I think you need a new girlfriend too, one who doesn't see your money as her luxuries. I note she didn't tell you to get yourself out of debt, open an ISA, spoil yourself etc. instead, keep it for when she wants it.

Use the money to clear as much debt as possible, clear the rest and start saving, see how long she sticks around

ILW

jamesarpc wrote: »

Plus the additional £267 a month would allow me to move closer to work and reduce my £220 a month fuel bill so yes it would.
Sensible suggestions only please as this is a complicated issue.
I have £5000 to put towards loan, what's the best way of making up the rest...save for it? cheap rate loan?

STOP COMMENTING ON SPELLING

Doubt if it would have been commented on if you hadn't said that you were a journalist. Might be worth considering a different career where spelling and syntax are not so important.

iolanthe07

It is the soul reason

Journalism would hardly be a suitable career for someone who thinks spelling, grammar and syntax are trivial matters. A spell check would not have marked 'soul' as incorrect, even though my seven year old granddaughter would know that, in this context, it should be 'sole'.