How best can I pay off my debts with the money I have?

jon142

Hi All,

I'm just looking for someone in the know to help me figure out some repayments.

I have a 7500 Loan with First Direct paying £224 PCM, I have 29 months left on a 36 month term APR is 5.1%

I have a Sainsbury's MasterCard with £2200 sat on it @ 7.8% life of the balance.

I have a barclaycard @ 10.9% with 800 sat on it, this is 0% till 10/08/2014

I also have £3000 sat on a post office CC. 18 months 0% started this yesterday.

And another £3350 sat on a Santander CC again 18months 0%.

My problem is I have £3500 bonus from work this month and the "£3000" from post office is sat in my current account at the moment.

So I can pay £6500 OFF. but what do I pay it off?

I wouldn't class my debt as out of hand I have more than enough income and meet payments.

I also have 2 x cars which I bought with the debts above so it's not a result of over spending it's the result of buying an asset.

kerri_gt

The standard advise is pay off the highest apr first, although check if the loan has any early repayment penalties.

Sorry but I beg to differ about the cars, firstly are these classic / collectible models that will appreciate value? If not, although an asset, they depreciate every day. As an FYI, I know of someone who just spent £17k on a BMW, because she could, with her annual mileage it will depreciate £2 per mile :eek:

Secondly, unless you paid off the cars put on credit as soon as the statement came in, them it's still overspending. Overspending is spending more than your available income and funds. Don't kid yourself otherwise.

Lucky for you to be in a position to meet your repayments. What would happen if your employment situation suddenly changed?

spidereyes

Just to be clear, when you say you have 3000 in your curent account from the post office, is this the same 3000 you refer to on the post office credit card, as in you have a unused credit limited as opposed to cash in the bank?

jon142

Funny enough I have 2 cars but I don't use any to get to work because it's a 10 minute walk.

Work is perfect at the moment, company is doing well and everything is on the up. Hence the bonus.

So in theory if work situation changes I would be forced to sell the cars which are worth £7000 & £4000 respectfully.

Obviously depreciation is a factor but they are 4 years old and 10 years old respectfully, so not going to depreciate as much as a brand new car.

One is my weekly car for doing any long drives the other is a sports car. As stupid as it sounds it's the one thing I enjoy so it's my hobby.

I have around £400 a month to throw at the debts ontop of the £6500.

jon142

spidereyes wrote: »

Just to be clear, when you say you have 3000 in your curent account from the post office, is this the same 3000 you refer to on the post office credit card, as in you have a unused credit limited as opposed to cash in the bank?

The £3000 is cash in the bank that's been transferred there by the post office credit card.

It was in the hope to pay off the loan I guess.

jon142

Loan has £6459.00 left on it that was a settlement figure from FD.

spidereyes

jon142 wrote: »

The £3000 is cash in the bank that's been transferred there by the post office credit card.

It was in the hope to pay off the loan I guess.

If I understand correctly then in which case this isnt your money, its borrowed from the post office at 0% for 18months, So all you will be doing is shifting the debt from one to another rather than repaying in full?

[Deleted User]

I'd use the £3500 bonus from work, to kill off the Sainsbury's MasterCard, which is currently the highest APR.

Out of interest (no pun intended), what are you currently paying toward this?

jon142

spidereyes wrote: »

If I understand correctly then in which case this isnt your money, its borrowed from the post office at 0% for 18months, So all you will be doing is shifting the debt from one to another rather than repaying in full?

Yes so effectively I'm switching either the 5.1% apr or the 7.8 apr from sainsburys to the 0% for 18 months with the £3000

jon142

Bedsit_Bob wrote: »

I'd use the £3500 bonus from work, to kill off the Sainsbury's MasterCard, which is currently the highest APR.

Out of interest (no pun intended), what are you currently paying toward this?

I usually pay £100 + interest per month to bring it down by a round number.

Last month interest was £12.78 on £2200 balance. So I paid £112.78 payment.

Minimum payment is around £37 - £40 PCM

Firewalker

I'll do the following:

1) Pay off Sainsbury and Barclaycard (£3,000);
2 Use the rest (£330 or so) and the £3,000 form the 0% Post office card to reduce the loan.
3) Redirect all you've been paying on Sainsbury and Barclaycard to the loan.
4) Pay the minimum amounts on the 0% cards
5) Once finisged with the loan (in about 4-5 months or so) continue to pay the minimum on the 0% CC
6) Put all money you would have otherwise paid on debt in an ISA (look at Nutmeg).
7) When the 0% cards end you'll have money saved to pay them off.

You will be debt free without pressure and stress.

Firewalker