How to clear debt quicker?

oliviarosejackson

Hi everyone,

Not sure if anyone can help, but I was wondering if there were ways to clear our debt quicker?

We have just cleared our £800 OD happy days. We dint have credit cards. We have our mortgage and a £7,000 loan. We have had the loan since June this year and it is for 7 years, unsure of the rate. We also have our mortgage which we took out last year. It is fixes rate for 5 years.

We are being very very sensible with our money at the mo, managed to clear £500 of the OD when I was on unpaid mat leave. I am going to be getting rid of a few extra DD in the new year, virgin, football fountain membership, which should save us £60 pm roughly.

We are also trying to do home improvements too. So a lot going on.

OH gets paid 4 weekly, so on his next payday we get a free month so to speak, so can save a chunk of his wages.

This is turning out to be very long winded. I am hoping as of Jan we can start putting away £100 pm for pure savings, not allocated to anything, eg Xmas. Which would give us £1200 by the end of the year. Are we best using it for home improvements or paying off the loan?

What happens if you make an overpayment on a loan, does it cut down the amount of time we are paying it off? Would we benefit from the overpayment?

Thanks in advance.

sugarcube84

i would say pay off the loan, if you find out the interest rate and use the snowball calculator it will tell you how much better off you could be.

Loans usually have part and full repayment penalties, you would have to check your loan agreement, i think ours it 1 months interest for part repayment and 2 months for full.