Help needed

Char_lauren

Hello

I have been lurking on this board for about 6 months and now have the guts to ask a question!

I have 2 different loans

Loan 1 £2702.03 apr 27.5 min payment per month £158.04
Loan 2 £1602.00 apr 26.9 min payment per month £76.04

Now I pay the minimum payment each month but have been starting to make extra payments as I want it gone quicker!

Now I have been on snowball to see what my options are and how far away I am from debt free!

I want to know where would be best to chip at first. I know the loan 1 would be best but loan 2 is smaller and would be quicker to get rid of. I am setting £300 (loan 1£200 per month, loan 2 £100 per month including min payments) a month to pay off so they are rounded up but now want to make any extra money to pay off.

Please could someone tell me which is best? Do I put all my extra money into the loan 1? So just make minimum payment to loan 2 or the other way around?!

Thank you in advance:) xxx

asparagus1968

hi,

are you sure you can actually make overpayments on these loans?
you need to check in your T&Cs.

If not, stick the money in a high interest as you can find until you have enough to pay off in full.

[Deleted User]

I'd usually say trust the Snowball Calculator, as that will give you the cheapest way to pay them off.

However, on running your figures through the Snowball calculator, the extra interest for doing it the other way is just £5, so I guess the psychological benefit of clearing the smaller debt first, may be worth it.