Repayment to Interest Only

Noobie2011

OK so it has been a month or so since I have posted and things have not really changed. Mainly due to a car bill coming up so have had to use most of the money I would have ploughed into paying off a credit card on that.

However I am now going to be coming into some money soon, around 10k and my first thing is to pay off as much debt as possible. Now my first instinct is to use as much of the 10k on Credit cards after I have paid 118 188 as their interest is the highest.

So wanted to check is this the best approach in terms of what I need to pay off first?

Noobie2011

Can anybody help here as it seems have been given a lifeline and want to make sure I am doing the right thing.

As mentioned before I have access to 10k(family loan) in order to pay some of my debts off and reduce my monthly payments by quite a bit. Initially with the 10k I would be paying this back at around £220 a month over 5 years. My plan would be to pay off the below which would save me around £530 a month so once I took off the extra £230 loan payment it would be an overall savings of nearly £300 a month.

Debt: 118 Loan
Amount: 4k
Monthly Saving: £255

Debt: Vanquis Card
Amount: 2k
Monthly Saving: £90

Debt: Barclaycard
Amount: 1200
Monthly Saving: £60

Debt: Barclaycard
Amount: 1200
Monthly Saving: £45

Debt: Capitalone
Amount: 1k
Monthly Saving: £34

Debt: Aqua Card
Amount: £850
Monthly Saving: £42

Debt: Capitalone
Amount: £200
Monthly Saving: £6

The above plan seems to pay the most in terms of quantity of debts and a lot of the bigger Interest ones. I am just wanting to check this is the right approach as it will still leave me with a few debts but now I will have quite a bit spare every month to really make a dent in paying the rest off

Thrugelmir

Highest interest first is the best route. Also close the accounts once they're cleared.

Noobie2011

Yeah that is my thinking too, high interest and then close the accounts.

I am just checking I am closing the right ones as the debts I will have left still are:

DFS Furniture: £2,466.56 Remaining
Monthly Payment: £60.16
Last Payment: Dec 2018

Fashionworld: £2500 Remaining
Monthly Min Payment: £140

Car Loan: £14,623
Monthly Payment: £250
Last Payment: May 2020

2nd Mortgage Charge: £16,500
Monthly Payment: £385
Last Payment: May 2019

Card Limit and rough Min Payment
VANQUIS BANK £500.00 - £25.12
CAPITAL ONE £2,550.00 - £98.09
Barclaycard IHG £5,000.00 - £123.00

So out of the above my only other option to look at was paying a chunk off the 2nd Mortgage to see if that slashed Interest and reduced the payments to give me more of a monthly savings over what I originally was going to use the money for

ViolaLass

The monthly payments are not the key information, the interest rates are.

Noobie2011

ViolaLass wrote: »

The monthly payments are not the key information, the interest rates are.

I do agree but I am also conscious that I make the most of creating as much disposable income each month so I can use that money to pay off the rest of the debts if that makes sense.

However the debts I am paying off are mostly the higher Interest ones anyway which are naturally the higher monthly payments too.

getmore4less

It's all about the rates, highest to lowest in that order that frees up the most money.

Unless you post the interest rates no one can have a clue whats best.

ViolaLass

Noobie2011 wrote: »

I do agree but I am also conscious that I make the most of creating as much disposable income each month so I can use that money to pay off the rest of the debts if that makes sense.

That could be a short-term gain only unless you focus on the interest rates.

Noobie2011

Okay, let me see if I can list all my debts with the rate etc

Noobie2011

So the rough Interest Rates I know are

Barclay £1200 2.50% IHG £5000 1.70% Barclay 2 £1200 2.58% Capital one 2 3.53% Capital one £200 2.00% Aqua £850 3.53% Vanquis £1000 3.00% Vanquis 2 £2000 3.50% Ocean £1000 2.40% Fashionworld 3.00%