Endowment ending - Appreciate advice

pazza50

I have one of several endowments with one ending soon circa £16K. Should I pay straight to my bank to pay off some of my mortgage, which it was intended or pay off my credit card of £12K at 19.9%. My short term gut says pay off the credit card but what impact will this have on the bank. Are they expecting it? Appreciate any views

sheslookinhot

Pay off the credit card, then work hard to reduce your mortgage. Is it repayment type, if not then it would be start to make it so,

Dick_here

Pay off the cc, pay 4k off the mortgage, increase mortgage payments by amount of monthly endowment cost saved.

holly_hobby

The current cc interest rate is no doubt much higher than the current payrate on your mge - BUT unless you are disciplined and will have the continued capacity to overpay, and will be able to repay a sum at least equal to the policy proceeds (currently being discussed) off your mortgage before/by redemption, AND not build up your ccard borrowings to the same level again .... I would always reduce mge/secured debt as a priority in ranking.

As the ramifications and issues of being unable to fully redeem the mge at redemption are serious, which you may be further exposed to by a shortfall to target at maturity of your other endowments, which would place you in a much more precarious position, than reducing the unsecured cc debt at this point (notwithstanding the initial saving of cc interest, which I feel is only jusitified in comparison to the mge IF the cc balance is not re-increased). Unless you will have the capital to absorb at redemption the element of the loan relating to this policy, together with funding for any further possibile shortfalls to target occuring from your other mge repayment vehicles you say are held.

To that end, you need to look how long till redemption, and also review and consider what your EMVs are for the other policies you hold, and make a balanced and informed decision from there accordingly.

The above is based on the limited info provided in the original post - so if a medium to long term to redemption, and your other pols are already indicated to at least be/or close to target , and you are able to replenish the otherwise utilised policy funds, to repay the mge when reqd - my opinion and guidance may indeed alter.

My comments are based on my overriding concern with reducing rolling debt accounts from/with mge funds or remortgaging, is that they are so easily re-inflated and then the individual is back to square one, but with increased liabilities, in both a higher mge debt than may be necessary and unsecured debts - it can be a v dangerous financial game to play, IF not disciplined as I stated at the opening.

Hope this helps

Holly

pazza50

Thanks everyone for contributing. Holly you have given me much food for thought