Help me sort priority

Oregon

Hi guys

I currently have

Two overdrafts
Two loans
Four credit cards

And am expecting funds soon which will enable me to clear a fair bit but not all

One of my ccs is 0% for another year and a half so I was thinking of leaving that in place, continuing to make min payment to it AND setting up a direct debit to a savings account (from the funds I'm going to free up from not having to pay other monthly payments to the ones I clear) so that after the year and a half there is enough sitting in savings to pay the balance before I incur any interest. I know I am going to have to be really strict on this....

Then I'm thinking to clear both overdrafts to get in the black for the first time in about 6 years

Also clear my biggest loan, biggest credit card and smallest cc (highest %) and cut up cards!!!

I'll then have one loan and one cc (both approx £) and I can clear one and have a chunk left over

Thoughts?

One part of me thinks pay the visa, cut it up and continue with the loan repayment until the end. But knowing that I can't make overpayments to my loan, the other part of me thinks I might get there quicker if I get rid of the loan and then join a load of challenges to make additional chips at the visa bill (I know that I will try harder if it results in an actual additional payment to the card rather than having to build up a pot to eventually pay the loan... If I do it the pot way I will keep dipping into it)!

Sooooo, loan or cc based on the above and my honesty!

Tixy

Have you looked at the snowball calculators? These can be a good way of working out the best way to pay off debts, though of course can't take into account the pyschology that we feel in finding it easier to pay off some debts rather than others.

Are you saying you will receive enough to clear everything except one debt? If so then your plan to just leave the 0% card sounds great. Or is it that you'll be left with the 0% card plus either the loan or another card? If its this then what is the difference in the 2 APRs?
If you end up with 1 card 0% and 1 thats charging interest then you can always check to see if either of the 2 other cleared cards would give you a 0% BT deal to move the interest charging balance onto a promo deal as well.

Little_Miss_Uni-Debt

Finding out the APR's will help you to find the order to pay them off and you can calculate exactly how much it will cost you if you know the exact balances of your cards etc.

Oregon

Yes it will leave me with the 0% one and then either about £3k on a loan at around 9% or £3k on a cc at the usual 25+% but I will be able to chip away at the cc gradually and steadily whereas I wouldn't be able to with the loan.

Tixy

Well that is quite a difference in interest rates, and so I'd want to suggest that you'd pay off the card and stick with the loan. But do understand that you can't overpay the loan and it can be harder to be discplined with savings. So maybe calculate how much interest you will pay in total if you paid off card and stick with the loan on usual payments? i.e assuming you don't manage overpayments. Then compare that to what you expect to pay in interest between then and when the card is fully cleared based on making payments of x per month (make x achievable/realistic but obviously more than loan repayments).

What cards are the 2 you will clear in total? (which providers/banks)? are these cards still active and open for future use - eg you haven't opted out of future rises?
Do they have limits of over £3k?

You might want to look on this thread - Unoffical Existing Customer Balance Transfers
- to see how likely it is you might get a 0% deal from these once they are paid off (look towards the end of the thread for the more recent deals).

Oregon

ok thank you, i will have a little think... so many options so little money eh!