What shall we pay 4k off? Your advice pls

cobbingstones

How all,

Could I ask some advice on which bill to pay off first? We have approx £4k to throw at a bill in a few months time but I'm undecided at which one.

We have Barclays overdraft (Additions) which is at the max £5k. This creates alot of interest each month. Therefore we think this would be best paid off? But we desparately need to drop our outgoings too. We owe about £6K on M&S (low interest) and a whooping £16K on a loan (again low interest). We are paying back M&S the minimal every month but the big loan is the problem with the repayments at £375 monthly. This wouldn't change if we paid the £4k off.

Sorry if i've missed out info.

TIA

MM

Crown

Hi MM,

I Personally would pay a major chunk of the Overdraft off as this is one of the hardest types of debt too clear as you live in it most of the time. If you do pay it off the OD then make sure you reduce the overdraft with the bank as otherwise the temptation is still there to use it. Im not saying canel it all but reduce it by what you can realistcally afford.

Also are you still using the overdraft to live on? Or are you now liuving within your income? If you are still using the overdraft then you need to work on clearing it first as its very hard to become debt freewhy still using credit of any type

Good luck