Clearing Debts

LRS1977

Hi All,

I have been lurking on these forums for a few weeks now reading various posts and I have been inspired to get my finances under control.

Currently I have owe just over £18000 on a Nawest loan, £1400 on a Natwest CC and £4000 on Capital One card.

Up until this week, I have been very worried about my finances and started to think about speaking to Step Change and going down the DMP route.

However on Thursday, I got a letter from my bank and they have upheld my PPI complaint and they have awarded me over £12000 :j (They say this could take 28 days for me to get the money so I'm not counting it yet)

Obviously with this money, I will clear down and close both the credit card accounts which will leave me with about £6000.

I also need a new car for work. I am traveling over 250 miles a week and my current car drinks far too much petrol so want get a diesel or something cheaper to run. If I spend say £2000 - £3000 on a car that will leave me with roughly £3000 left.

My question is what do you think I should do with the remaining money. Should I pay off a big chunk of my loan and if I did that, what affect would this have on my monthly payments? I am currently paying £369 a month and I have just over 6 years remaining on it.

Ideally I want to get things paid off as quickly as possible but with Christmas on the horizon, I'm slightly reluctant to spend all of it on paying off debts (even though I probably should)

I realise I've been a little fortunate to get this money (even though I paid out for PPI I didn't need) so want to make the most of it and ensure I don't get myself in so much debt again.

Any advise on what I should do with the remainder of the money would be greatly received.

Thanks

laurenjr

Hm,

is your car going to be second hand? I have seen diesel cars out there for less than that, what about your current car are you selling that?

I can understand what you mean about Christmas on the horizon but you could cut back a fair amount and say keep £500-£1000 by for Christmas.

whatever you don't spend from that can go back on your loan.

so if you got a second hand car cheaper than 2000-3000 that's could also go to your loan and the money from your current car being sold could also go towards your loan

effectively you could pay a fair chunk off of your loan with this.

good luck

asparagus1968

put all the PPI money towards the debt, and the car. Bear in mind diesel is more expensive than petrol....
then make up a monthly budget, you could have a look at the Statement of Affairs used on here
http://www.stoozing.com/calculator/soa.php

you will find you have a surplus now you don't have those credit card debts, pop this into a savings account-there is your Christmas money

really glad for you, good luck