What to do, pay loan off or keep the dosh?

pdvinuk

Hello,
I'd really appreciate any advice on what do with the situation I'm in.

I made an investment which has paid off recently resulting in me having 19k in the bank. I want to buy a house this year and use part as a deposit however I have 6k outstanding on a loan which is £232 per month. Do I pay the loan off then try to save the fee back up or just carry on with the payments and use the money I have for a deposit. It has affected what mortgage I can afford.

many thanks
Peter

mgdavid

to me, no-brainer
pay the loan off with some of the capital.
Set up a standing order to save £250 a month into the house-buying kitty.
Not 'try', JFDI.

PS - many congrats on the investment !

HappyMJ

Pay the loan off.

pdvinuk

Thank you.

I fell stupidly lucky. £3,600 investment turned into 19k. Once in a lifetime opportunity and I'm glad I had the balls to do it.

I'm leaning towards paying it off. I'll will post back when I decide either way.

CLAPTON

do you have sufficient deposit for a property

have you used the mortgage calculators to see whether having a debt affect how much your mortgage offer will be reduced

pdvinuk

It does reduce the mortgage I'm offered and yes, I would just have enough for a deposit but it will be tight.

I've been researching the housing market and most experts say it's going to fall this year so I should be able to save the loan back up.

Mrs_Arcanum

Remember paying the loan off early will also save more as you get an early repayment discount. Then another bonus is an improved credit rating.

catokelly

Pay the loan off and have a fresh start... In the long run you would end up paying more than you need to if you dont.

xylophone

Pay off the loan (assuming there's no huge early repayment penalty) and save the £232. Are you using your cash isa allowance?

pdvinuk

I'm going to pay the loan off.

Thanks to everyone who replied, it's really appreciated you all took the time to reply.

Peter