Paying off 2 loans, best way forward

sarahj1986

Hello all

First off apologies if this is in the wrong forum but I need some advice about my loans and paying them off the most money efficient way.

I have two loans -

1, a £3000 loan which the interest rate is 18.9% over 36 months. I've 31 payments left at £110.80. I have around £3434 left on it (that's according to my HSBC bank today)

2, a loan originally worth £25,000 over 30 years. It was part of a mortgage which has since been paid off. The rate is 7.49% and there's 27 years and 8 months left and it's around £22,000. Minimum is £158.46 per month but I've increased it this month to £200. This is a joint loan but the other person my ex isn't giving me any money.

From the sale of the flat I now have £3600 left which is sat in a low rate account. The flat sale went through mid November so things have only fully been finalised for afew weeks. The ex was controlling, emotionally and sometimes physically abusive. Before the flat sold she deliberately took a box of my processions, it contains baby photos, CDs, DVDs and other bits and bobs, nothing worth anything money wise but important to me. The £3600 she claims I owe her because of a loan she willingly paid off around 2 years ago and she's refusing to give me my box back until she gets "her money" she's been quite threatening towards me because of it and before I blocked her number she said she would could round my flat (she doesn't know my address) but it really scared me. I don't wish to contact her at all but I'm still lumbered with this debt that is jointly ours.

I've accepted that I probably won't get any money off her for it. I wouldn't even know how I can force her to pay, right now I can't afford legal fees. I don't want her to think she's got away with it but at the same time I don't ever want to speak or see her again. My main concern is getting both loans paid off quickly, I don't want that big loan to sit against my credit file for 27 years.

I want to use the £3600 but I'm not sure how I should do this. My brain is telling me to pay off the smaller loan which in turn frees up £110 of my outgoings and I could increase the monthly DD on the bigger loan to get it paid off sooner but I'm not sure if this is the right way to do it?

Any advice would be appreciated

Thanks

The_fog_has_lifted

sarahj1986 wrote: »

Hello all

First off apologies if this is in the wrong forum but I need some advice about my loans and paying them off the most money efficient way.

I have two loans -

1, a £3000 loan which the interest rate is 18.9% over 36 months. I've 31 payments left at £110.80. I have around £3434 left on it (that's according to my HSBC bank today)

2, a loan originally worth £25,000 over 30 years. It was part of a mortgage which has since been paid off. The rate is 7.49% and there's 27 years and 8 months left and it's around £22,000. Minimum is £158.46 per month but I've increased it this month to £200. This is a joint loan but the other person my ex isn't giving me any money.

From the sale of the flat I now have £3600 left which is sat in a low rate account. The flat sale went through mid November so things have only fully been finalised for afew weeks. The ex was controlling, emotionally and sometimes physically abusive. Before the flat sold she deliberately took a box of my processions, it contains baby photos, CDs, DVDs and other bits and bobs, nothing worth anything money wise but important to me. The £3600 she claims I owe her because of a loan she willingly paid off around 2 years ago and she's refusing to give me my box back until she gets "her money" she's been quite threatening towards me because of it and before I blocked her number she said she would could round my flat (she doesn't know my address) but it really scared me. I don't wish to contact her at all but I'm still lumbered with this debt that is jointly ours.

I've accepted that I probably won't get any money off her for it. I wouldn't even know how I can force her to pay, right now I can't afford legal fees. I don't want her to think she's got away with it but at the same time I don't ever want to speak or see her again. My main concern is getting both loans paid off quickly, I don't want that big loan to sit against my credit file for 27 years.

I want to use the £3600 but I'm not sure how I should do this. My brain is telling me to pay off the smaller loan which in turn frees up £110 of my outgoings and I could increase the monthly DD on the bigger loan to get it paid off sooner but I'm not sure if this is the right way to do it?

Any advice would be appreciated

Thanks

i think you are right to pay off the smaller loan first then it is put to bed and gone.
With regards to the joint loan, is this with a wife???

are you in civil partnership?? if so you could try to get her to pay half via the divorce settlement but realisticly it could cost you more than you could gain from forcing her to pay- im learning that now the hard way too with my ex husbeast.
sorry im not good at offering advice- was the house sale in joint names?? presumably she got have the proceeds of the sale too??

she cant have her cake and eat it- if she got her half she needs to grow up and move on- tell her if she doesnt give your stuff back you will be instrucking the police to recover your belongings from her and will persue criminal proceedings.:)
hope this helps. x

sarahj1986

The_fog_has_lifted wrote: »

i think you are right to pay off the smaller loan first then it is put to bed and gone.
With regards to the joint loan, is this with a wife???

are you in civil partnership?? if so you could try to get her to pay half via the divorce settlement but realisticly it could cost you more than you could gain from forcing her to pay- im learning that now the hard way too with my ex husbeast.
sorry im not good at offering advice- was the house sale in joint names?? presumably she got have the proceeds of the sale too??

she cant have her cake and eat it- if she got her half she needs to grow up and move on- tell her if she doesnt give your stuff back you will be instrucking the police to recover your belongings from her and will persue criminal proceedings.:)
hope this helps. x

Thank you for replying. We weren't married or in a civil partnership we lived together for 7 years as common law partners. The mortgage was joint as was the loan and were done together as part of a + mortgage with Alliance and Leicester (back in 2007)

I think the best way forward is to pay off the smaller loan. There's £3434 left on it but that's with interest on top, I think it would be under £3000 if I paid it off now so I'd still have some money left which I want to use for my new partners birthday in October (it's his 40th)

With my box I know where it is, we had arranged a hand over back in November but then she pulled out due to "her money" again. She's threatened to burn the contents which I think is so cold hearted especially as she knows what's in the box, what kind of person could willingly burn baby photos? I don't known if the police would do anything about it though

I'll look into paying off the smaller loan and also increase my payments on the larger one. I worked out that by over paying at my current rate and if the interest didn't change then I've already cut 7 years off the loan life. If I over pay it by say £100 I could get it down to around 12/13 years, my plan is to have it paid off in 10 years which is achievable.

In terms of getting money off her I think it's slim. She had £7000 from the sale (that was after all the fees were deducted) but before the sale completed I found out she had been using the joint loan for her own personal expenses, in essence stealing from me and working out her outgoings per month she's living beyond her own mens so that £7000 wouldn't last long. I just don't want her to think she's got away from it scot free. It's still a joint loan and me thinking ahead and in thinking worst case scenario if she died then I'm left with it but it also works the other way round yet I don't even think that's occurred to her at all, she's not even considered it against her credit file or anything like that. I have and it worries me.

It's a horrible situation to be in and I know it won't be resolved overnight. The best thing I can do is try to pay them off quickly.

enthusiasticsaver

The most efficient way to get rid of debt is to pay off the one charging the highest interest rate so yes in your case that would be the smaller loan. As you say this then frees up the monthly payment from that to throw at the larger loan to pay it off quicker.

sarahj1986

enthusiasticsaver wrote: »

The most efficient way to get rid of debt is to pay off the one charging the highest interest rate so yes in your case that would be the smaller loan. As you say this then frees up the monthly payment from that to throw at the larger loan to pay it off quicker.

Thank you I'm going to contact my bank and arrange pay off

The_fog_has_lifted

well done sarah- you seem right on track. :-)

sarahj1986

Hello all

Just wanted to keep you up to date - I've paid off the smaller loan to a total of just under £2900 (saving £500 worth of interest that us have paid over the life of the loan)

I've played around with the figures on the bigger loan and for now I'm going to increase the monthly payments by £100 so £258.46 which will cut it down to around 16/17 years as opposed to 27, plus save me some thing like £8000 worth of interest by paying it off early. I hoping to get this paid off completely in 10 years hey who knows what will happen in the next few years.

As for the ex, I will seek legal advice about how I can get her share of the repayments back, after all it's a joint loan why should I be left with it all? When I seek legal advice won't be straight away but when I can afford it or find time to speak to citizens advice.