Advisen me on how to get out of debt!!

Hi Guys

I currently have a £13,000 Loan that i have taken out with Egg at 7.9% apr to consolidate a few debts that i have built up over the last few years, through excess partying, going out with friends,etc, etc. what would be the best way i could go about paying this loan off faster it is for 54 months. I have two jobs one which pays around £300 a month after tax and the other pays £1029 after tax. ( i use the job that pays £300 a month to make the loan repayments) from my other job ( the one that pays £1029) i have approx £500 left to either put in a savings account or pay more off the loan.

Please would you advise me which would be the more sensible option many thanks peeps :beer:
Savings Total so far for 2023: £8,062.58

Comments

  • Woby_Tide
    Woby_Tide Posts: 5,343
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    unless a savings account is paying 7.9% after tax it's better off putting the money to wards the loan(unless you want to create a savings pot to cover emergencies first then start paying of loan with that money, i.e. save first couple of months payments in decent account)
  • Debt_Free_Chick
    Debt_Free_Chick Posts: 13,276
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    Is this the Egg flexible loan? If so, I thought they let you pay off extra whenever you wanted to.

    James - check the terms of the Egg loan or send them a secure message.
    Warning ..... I'm a peri-menopausal axe-wielding maniac ;)
  • James240
    James240 Posts: 16,387
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    hi guys thanks for replying, it is the egg flexible loan which enables me to pay off extra bits off theloan, i didnt know weather or not i should do this or i should be putting money away and saving it .......... so itake it i should be paying extra bits off the loan then?
    Savings Total so far for 2023: £8,062.58
  • Are you in a position to get one of the 0% Credit Card deals? I fso you could get 1 of these and use it to pay off a lump sum of your loan and then pay this off. With £500 spare each month you could clear a large amount off in no time.
  • saubryn
    saubryn Posts: 610 Forumite
    I'd be inclined to put away two maybe three months of loan payments out of the extra to cover emergencies, then after that throw as much as I possibly could at clearing the loan.

    I used to have a good job and was meeting (and paying extra) on my payments, but then when I lost that job I had absolutely no money to make payments for a few months, and that didn't help me with landing in the mess I'm in now, so that's why I'd be inclined to save at least a bit of a backup, but usually you're better off paying debts just to save the interest charges.

    It sounds like you're in a good position to clear this off quickly, good luck!
    DFW Nerd No. 140 :)
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