Spare £3K

Scale_Rule

Right then. I find myself with a 'spare' £3K.

The question is do I throw it at clearing the 0% CC (currently sending £100/month at this) which has a balance of £2.4K? Thus mentally clearing a debt.

Or do I put it against the £16K loan I have in the knowledge it will save me more in the long run?

What would you do?

JimmyTheWig

When does the 0% run out on the credit card? What rate will this revert to when it runs out?

What rate are you paying on your loan? Are there any charges for paying off a lump sum from the loan in this way? Will interest be recalculated on the loan straight away when the lump sum is paid off?

19lottie82

Pay off the loan is the obvious decision, if it saves you money in the long run.

Pay off debts with the highest APR first, that's the golden rule.

Delree

Will the £100 per month clear the 0% card in time for the rate hike or are you hoping to jump ship? Either way it might be sensible to keep enough back to pay the balance off if you can't switch as surely the credit card will be higher in interest than the loan. If you can switch, bonus pile it into the loan.

Scale_Rule

Thanks all.

12 months left on the 0% CC. If I pay off then I could move the £100/month that is going here to the loan. There is likely to be 1.2K left at the end of the deal but I should be able to get another 0%.

No penalty for paying off the loan early, in chunks or adding extra each month and the interest is calculated daily.

JimmyTheWig

I'd be tempted to say use the money to pay £1.2k off the credit card now and £1.8k off the loan. Then your monthly payments will clear the card before your 0% runs out and you'll still reduce interest on the loan by a decent chunk.