Where would you start?

Sheep

I earn £32317 and my wife earns £18300.

I also receive £1000 after tax bonus every 3 months.

We have way too much debt and would like to know where you think we should start overpaying?

My debt is as follows;

£16k to First Direct personal loan. 6yrs remaining and £220pm
11k to Renault Finance which is £200 per month.
£300 credit card debt.

My wife's debt is as follows;

£8000 on credit cards
£9500 loan with Nationwide with 4 years and 8 month remaining 193pm.

We have approx £500 spare per month to overpay on debts. Where would you overpay first? CC debt?

Thanks

Sheep

fatbelly

Whatever is the highest APR.

If you can get credit card debt on to 0% deals obviously that goes to the bottom of the list

skyshadow

One option Ive found if you have a large amount of liquidity is to pay a large chunk on credit cards each month and then use the credit cards in place of any cash purchases you would make.

This will offset some of the monthly interest which on £8000 would be pretty hefty, at least that way any overpayments to the debt will start to make an impact instead of treading water just covering interest.

cookson

A full SOA would be very useful to see, as you say yourself you have way too much debt.

Posting an SOA will allow people to advise you where you may be able to make savings, live more within your means, and pay off your debts faster.

Good luck in your journey to pay off your debts It will be hard, but it will be extremely worthwhile.

Dobbibill

Hi Sheep,

As suggested, you need to start with a SOA, here is the link.

Gather up all your details so you can enter the APR. You need to focus on the highest interest rate first and then begin snowballing.
This is where you pay off one debt then use the money from that debt to overpay on the 2nd and so on, until you are debt free. Here is a link for that too.

All the best.

DB