Debts vs Savings confusion....

SarahNeedle1872

As u can see from my sig, I'm currently saving towards my credit card... I've applied for another 0% for when this runs out in July, and intend to keep saving/selling to get as much money as possible to pay it all off ASAP.
BUT once I've paid that off, I don't know what to do with my loan.... The APR is 6.9%, but because I only got it last Oct, the interest was worked out at the beginning and forms part of the payment (instead of the 'rule of 78' or whatever it was called!)
What I'm trying to get my head around is... would I be better off to pay the monthly repayments to term (£224 pcm) and continue to save as I have been, but this time just for a rainy day etc? Or would I be better off saving until I have enough to settle and paying it off early?
I'm confused because of the fact that interest is effectively spilt across the term....
My savings earn 4.56 after tax (still waiting for my Barclays ISA!!!)

Help please guys, this could SERIOIUSLY reduce my DFD

mountainofdebt

Personally I think I would be tempted to put the money away so that I could pay off the loan once I'd saved enough but with the proviso that if the rainy day did happen then the money would be used for that reason instead.

CLAPTON

you need to know specifically what happens if you make overpayments or settle the debt early.. it should be in the T&Cs or phone up and ask.

TurnaroundSue

SarahNeedle1872 wrote: »

My savings earn 4.56 after tax (still waiting for my Barclays ISA!!!)

Just to let you know Sarah that I queried with Barclays today about when my ISA is to be opened, and they advised that there is a backlog due to the brilliant rate, but they are backdating any interest from the date that you submitted the form, so no interest will be lost due to the delay in opening.

Hope this helps a little bit!!

SarahNeedle1872

CLAPTON wrote: »

you need to know specifically what happens if you make overpayments or settle the debt early.. it should be in the T&Cs or phone up and ask.

When they sent out the papaerwork, attached was a sheet that basically said... If u repay a 1/4 way thru, u will pay this much, if u pay 1/2 way thru u'll pay this much etc etc etc. I worked it out from the number of payments left and the current balance, that at each point during the term, there appears to be no penalty, but I will double check the T's&C's to make sure.