Pointers on which method to use

jimmy*c

Evening all, hope everything's going well.

I'm just after a quick pool of peoples' opinions on which route I should take regarding snowballing.

My current debt is £7,254. I've used a snowballing calculator (source "what's the cost . com") and it says paying either interest or balance order, I will be debt free in 11 months making £700 worth of overpayments (including my minimums).

What would you guys do? I'm thinking to clear it in balance order so I can get the feeling that I'm making progress by settling accounts.

Thoughts?

abes86

jimmy*c wrote: »

Evening all, hope everything's going well.

I'm just after a quick pool of peoples' opinions on which route I should take regarding snowballing.

My current debt is £7,254. I've used a snowballing calculator (source "what's the cost . com") and it says paying either interest or balance order, I will be debt free in 11 months making £700 worth of overpayments (including my minimums).

What would you guys do? I'm thinking to clear it in balance order so I can get the feeling that I'm making progress by settling accounts.

Thoughts?

Depending on what your actual debts are ie credit cards loans ect, always pay highest interest debts off 1st, even if they are the smallest, that has helped me

jimmy*c

My debt is mainly loans. I have 3 - My dad lent me money, Barclays Partner Finance and Hitachi, with APRs or 2.8%, 15.9% and 15.8% respectively. I now use a Barclaycard Initial for my normal spending so I don't consider this debt as such (though in principle I am borrowing from them), but I have set up a DD for the full amount every month.

Having been pondering this all evening, I think it's safe to say pay the highest interest first as, regardless of the method, the ultimate debt-free day comes on the 11th month??

andyfromotley

There are two views,

In terms of purely financial terms, always pay of the highest first.

In psychological terms some people pay of the smallest first, as it gives them a feeling of progress. (particularly if there isn't a massive difference in the APR's)

Only you can work out which one works best for you, although i think you should definitely payoff the the 2.8% last!!! (sorry dad)