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What to pay off first? Looking for advice...

Hi all,

Long time lurker first time poster here. Looking for a bit of advice on what I should be paying off first with an aim to perhaps reduce the amount I pay overall (including interest etc).

Current situation:

Barclays 'Graduate Additions' Account: £0, £1700 overdraft available - £7 a month, 25p a day < £1000 overdraft, 50p > £1000

Club Lloyds: £-200, £1000 overdraft available, will be in the positive shortly after some expenses come in, free account. £6 overdraft fee + 23% interest.

'Classic' Credit Card from Lloyds: £1529, limit of £1900, 23.95% APR I believe

Graduate Loan: £7000, 12.9% APR

This is pretty much everything. Aside from the graduate loan, I wouldn't say I'm hideously in debt... most of it is unfortunately left over from living in Uni and the couple of years since then. I have a good well paying job now and actually am to be entirely free of all debt except the graduate loan within the next 2 months.

The graduate loan I pay off every month on time and never have I missed a payment on any of the above.

Any my question is... should I pay off the credit card using my Barclays overdraft NOW, or leave things as is and just pay off the credit card over the next 2/3 months.

See, I think my interest is about £30-40 a month with the credit card... and working out the fees the barclays would be...

Oct: £7 + 50p x 20 = £17 (payday on 25th so can bring down to < £1000)
Nov: £7 + 25p x 31 = £14.75
Dec: £7 + nothing (assuming will be under £500 or zero... £500 fee free)

That seems less than the credit card interest right?

What would everyone else do? Sorry if this seems a stupid question. Either way I know things will be paid off before Christmas, I just want to do what would save me the most money.

Thanks!

Comments

  • MadProf
    MadProf Posts: 63 Forumite
    Welcome to MSE! :hello:

    The only thing I'd say is that O/Ds are repayable on demand by your bank and this may put you in a sticky situation if they ask you to do so and you've used it to clear other debts. Not sure what the odds are of them actually requesting this before you've cleared all the debts but is it worth risking saving a few Quid for that?

    I'd probably get out of the Lloyds O/D as you're planning to do first and then just pay the max on your Lloyds CC, min on your loan and snowball the loan once the CC's cleared (highest to lowest APR snowball technique)
  • XboxFan89
    XboxFan89 Posts: 10 Forumite
    Thank you! :)

    Yes, that was actually the one thing that worried me. To be honest, my Barclays account was sat in it's overdraft at -1500 pretty much for at least a year from leaving University... but still I'm not sure it is worth the risk either.

    I like the snowball technique... found a website which worked out payments etc after you put details into a calculator... with what I can pay off it seems if I stick to that within a year the credit card and loan could be cleared... which I never thought would be possible !
  • getmore4less
    getmore4less Posts: 46,882 Forumite
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    You can always grab the free £500 to kick start, compare the cost based on that.

    How much free each month to cover the debts?
  • XboxFan89
    XboxFan89 Posts: 10 Forumite
    I'll need to work it out properly (actually look last month to see exactly how much I spend on food etc) but from rough estimates right now (usual expenses, bills) it is looking to be about £750-800 free a month to cover debts - in addition to the normal £250 monthly payment towards the loan I usually pay).
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