Debt shifting advise needed

gazza97

Hello everyone, I have just received some spare money and have several debts that I wish to clear but unsure as the best option for. My current bank balance is £6000 and I have a £3000 (15.43% EAR) overdraft facility bringing my total available to pay £9000 if I choose to use the OD facility
Balances currtley on various cards and loans are as follows
Nationwide credit card, balance £7000, APR 18.9%
Lloyds credit card, balance £700, APR 24.94%
Store loan £800, APR 24.9%
Nationwide loan £15,500 APR 7.5% with 3 years left to pay
I also ave an MBNA card that offers 0% interest on balance transfers until feb 2016 for a 3.5% charge and 0% money transfers for a 4% charge. The limit on this card for transfers is £7,500
Also by clearing some of the above debt this will leave me with aound £300 - £500 per month spare to continue to to clear the debt month by month
Any debt shifting advise would be welcomed
Thanks

twiggy86

Hi :wave:

I wouldn't use your OD to clear anything - leave that intact.

I would focus on clearing the highest interest debts first - Lloyds CC and store loan. This also means that you'll have wiped off two debts! I would then use the rest to clear as much as possible towards the Nationwide CC and then consider shifting what's left onto the MBNA card.

I hope that's the best advice but wait for someone else to come along to confirm!

Sazzie23

I'm not good with this sort of thing, but I think the snowball calculator 'google it', helps you try out different options on debt repayments to see how to achieve DFD sooner.

Honeybee91

I agree with twiggy86 don't use your overdraft at all.

Pay your Lloyds credit card and store loan first as they have the highest interest rates, this would leave £4500. Pay £4500 onto your Nationwide Credit Card.

Personally I would then balance transfer the £2500 left on your nationwide card to your 0% MBNA offer. This will give just under a year interest free. With the £300-£500 you have spare to pay against your debts, you may even be able to clear the remaining £2500 MBNA balance before the 0% period ends.

I would recommend closing credit cards once the balance has been paid so that there is no temptation to run up any debts on the credit card again.

BargainButtons

I have a Nationwide loan which was 5.9% interest. Their current rate is 3.6% so i applied for a new loan at the lower rate. Even after taking account of the early redepmtion fee i have saved a few hundred pounds over the course of the loan. I'd pay off your cards with the 6k.

BargainButtons

The 3.6% rate is only for loans up to £14500 so I'd use 1k of the 6k to bring your loan down to 14500. The repayments on a loan of £14500 over 3 years at 3.6% would be £425 so would save you quite a bit.