Need some advice please =(

edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
4 replies 759 views
PhaelokPhaelok Forumite
127 Posts
edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
Hi everyone,

I currently have £12,500 saved in a Natwest E-ISA account and this rate is scheduled to drop to 1% at the end of January.

In addition to the above, I also have a Natwest loan and pay £246 per month with the settlement figure now £3500.00

I save at least £500 most months and sometimes put more aside, however I am in two minds as to what to do concerning the loan. Should I pay it off or continue with the payments? To be honest the £12.5k is being put aside for a deposit on a house and it would take me approximately 6-7 months to get it back up to the original amount.

I am pulling my hair out - should this loan be paid off? :o

Replies

  • WilkinsWilkins Forumite
    444 Posts
    Phaelok wrote: »
    Hi everyone,

    I currently have £12,500 saved in a Natwest E-ISA account and this rate is scheduled to drop to 1% at the end of January.

    In addition to the above, I also have a Natwest loan and pay £246 per month with the settlement figure now £3500.00

    I save at least £500 most months and sometimes put more aside, however I am in two minds as to what to do concerning the loan. Should I pay it off or continue with the payments? To be honest the £12.5k is being put aside for a deposit on a house and it would take me approximately 6-7 months to get it back up to the original amount.

    I am pulling my hair out - should this loan be paid off? :o


    In simple arithmetical terms you should pay off the loan, but only you can balance this against your desire to get a house in the near future, since possible changes in the property market and the availability of mortgage deals are rather difficult to call. Sorry, not much help.
  • Archi_BaldArchi_Bald Forumite
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    You are most likely paying quite a steep rate of interest for that loan - a multiple of what you get in the ISA.

    It should be your highest priority to pay it off asap.
  • MasomniaMasomnia Forumite
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    4 and a bit months to get back to where you were if you save the money you were paying towards your loan.
    “I could see that, if not actually disgruntled, he was far from being gruntled.” - P.G. Wodehouse
  • staffie1staffie1 Forumite
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    I would pay off the loan. You will soon replace it by saving £746 pm.

    If you apply for a mortgage while still owing on the loan, the amount you still owe will be deducted from what you can borrow anyway.
    God, Grant me the serenity to accept the things I cannot change, courage to change the things I can, and wisdom to know the difference.
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