What to clear from this list?

MerseyLad

Hi,

Due to moving house, I have got a nice [lucky] amount of £18500 to put towards clearing my debts off. In total I owe £24722.75, so obviously I cannot clear the lot off. Therefore, would appreciate your advice on what I should do?

I know its obvious to say pay off the highest APR's and leave the lowest, but a couple of things come into play here.

1 - I used to work for the bank 1 of my loans is from, so got it at base rate.
2 - I dont know whether to leave the outstanding money as a loan or on a credit card [either one i have, or a new one and balance transfer]
3 - If I did the loan it would mean a £150 payment for 4 years, If i did the card it would mean a minimum payment of £100, with only £20 of that on interest, and so months when its tight [and it will be initially as its a new house] I can pay minimum - and when things settle look to pay more than the £100.

Anyway, here is a breakdown:

Loans

£54.63 a month - total left £1607.30 @ 9.9% APR
£94.70 a month - total left £2627.62 @ 4.00% APR
£153.47 a month - total left £6017.31 @ 12.9% APR = Total loans £10252.23

MBNA card:
£1604.03 outstanding - APR is 13.9%

Cahoot:
£6992.14 - apr is 10.8% = Total at this point including all the above £18848.40
Overdraft is at £730 = Total at this point including all the above £19578.40

Capital one:
£5144.35 - apr is 6.9% = Total at this point including all the above £24722.75

I have spoken with all 3 credit card companies and the APR on balance transfers would be the rates as on the cards at present.

I am thinking either clear everything but the Capital One card.
or
Clear all the cards and leave the loan at 9.9% & 4.0% and also a couple of thousand on the capital one card?

What do you think?

Any advice gratefully received.

Many thanks

MerseyLad.

OberonSH

Could you pay everything off, get a 0% card and transfer the capital one & overdraft onto it?

Otherwise Id clear the highest apr, followed by the biggest balances. That way you'd only be left with relatively small amounts - give you a boost mentally rather than seeing one high amount.

lizzyb1812

I'd go with your original suggestion - pay off the biggest APRs. Can't see why you'd keep on the loan at 9.9% unless there are swingeing redemption penalties.

When you're down to 6.9% and 4.9% balances consider a BT to a new 0% or low rate for life of balance card like the M&S one

lizzyb

lynzpower

Phone the loan cos and ask them what a settlement figure would be. I think clearning the 3 loans off will have a massively positive effect on your credit rating, and also mean that theres a fair amount "extra" every month.

And Id get rid of the cahoot one as well.

Then whats left once you have a) had your credit report as settled on 4 accounts, and you b) have joined the electrral roll in your new place, then you sohuld be able to get a low life of balance or 0% card for that

MerseyLad

Sounds good advice peeps.

So, clear the lot bar the Capital one card and possibly the overdraft [depending on the exact sum I get] That means 3 x loans are gone, MBNA is gone, and Cahoot is gone. Leave myself a balance on the cpaital one card at 6.9% for now, and move the overdraft and any remaining bts from the other credit cards onto the Capital One card. Then once im settled [month or so] apply for a 0% card and move that balance across?

Is that M&S card 0% for the life of the balance?

zipwen1

id clear the loans off too the ms card is 3.9% for the life of the loan and no transfer fees

AndyR_3

When you've cleared a credit card, ring and ask for the closures department. They sometimes offer a special rate for BTs that the normal customer service guys can't offer. So you could then save money by transferring one of the balances to that card. Depends on your credit rating and how the account's been managed though.

immoral_angeluk

What are the early settlement figures on the loans??

MerseyLad

immoral_angeluk wrote:

What are the early settlement figures on the loans??

As shown above.