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What to do with £6000 loan

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hello lovely people. i was looking for some advice. we have an overdraft of £9000 that we almost go over every month - thats costing us about £125 a month. and we have credit card debts of £4000 on a couple of 0% interest cards. Minimum repayment is around £100. we've cut all our spending to the bone but can't get rid of these debts.
i've got £6000 left in a flexible loan (i've already drawn down £10,000 to pay off other debts). draw this down and my loan repayments (now £75) will go up to about £110. what's the best thing to do with the £6000 - overdraft, credit card, leave it, something else? it's making my head spin trying to work it out.
Mark Hughes' blue and white army

Comments

  • Cardinal-Red
    Cardinal-Red Posts: 664 Forumite
    Part of the Furniture 500 Posts Combo Breaker
    In the simplest possible terms, it's best to get the most amount of money into the lowest APR situation you can.

    So why not post the APRs and minimum payments on your loans, overdraft and credit cards etc? Don't forget to include the flexible loan too!
    The above facts belong to everybody; the opinions belong to me; the distinction is yours to draw...
  • Malestrom
    Malestrom Posts: 983 Forumite
    The credit cards are at 0% so no point paying them off. You need to pay minimum payments on these, if you aren't already.

    I would imagine that the APR on the overdraft is way higher than the flexible loan. If so, then put the £6,000 into the overdraft, then reduce the overdraft limit to around £3,000 so your still knocking on the door of your limit. This is to prevent you pushing it back up again. Your monthly interest payment for the overdraft should be about £42, saving £83 a month. However, your flexible loan will increase by £35 pm. This leaves you roughly £50 a month better off. That needs to also go into the overdraft, until it is cleared. Then the loan is next. You need to remember to swap your CC's to keep them at 0% rates.

    If you post your full monthly outgoings we may be able to help you save more money.
    He huihuinga taangata he pukenga whakaaro – A meeting of people; a wellspring of ideas (Maori proverb)
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