Do I pay off a loan or credit card first?

Legacy_user

Hi folks


Some advice needed.


I have £6,400 to clear some debt and am not sure which is the best way to use the money.


Halifax Loan = £2,151.50 (settlement figure saving me £95)
or £184.04 for the next 12 months @ 13% APR (£28 interest pm (depreciating))


Barclay CC = £7,000 @ £195 approx pm @ 25.2% APR (£125 interest pm)


Nationwide CC = £3,000 @ £30 pm @??% APR (£5 interest pm)


Option 1: Pay off the Halifax Loan releasing the £184 per month and then £4,000 to Barclay Card and try to get a 0% interest CC to transfer the balance of the 2 credit cards and pay a substantial sum each month


Option 2: Pay £6,000 to Barclay Card, keeping the Halifax Loan and try to get a 0% interest CC to clear the Halifax Loan and the 2 credit cards and pay a substantial sum each month.


Option 3: any other suggestions/permutation.

andyfromotley

Clear the barclaycard. IME they will almost certainly offer you a 0% BT deal on that card. But even if they don't still pay it off.

Then use the cash freed up from the barclaycard to pay the Nationwide card as i am assuming ??% will be somewhere around 17%+

Then pay off the loan. (although it may well be finished before you manage to pay off the Nationwide card. If so throw that money to to the Nationwide too.

You should be debt free in just over a year.

System

Thanks for this Andy. Can I ask what IME stands for?

HappyMJ

5-year_plan wrote: »

Thanks for this Andy. Can I ask what IME stands for?

In my experience. Once you've cleared a Barclaycard IME you'll get either a 0% on BT offer or at the very least a low rate.

Paying off the Barclaycard will also give you an emergency line of credit. You can't borrow back the overpayments on the loan.