Here's my plan, any suggestions

Sazzie23

Am looking for advice if my plan is a good idea.

Current situation is BOI mortgage fixed rate 4.5% approx £19k
secure loan. Fixed rate 7.9% approx £29k
DMP. All now 0%. Approx £19k

I am currently only just paying above token payments on DMP but have a slight income increase which I will declare but think I can free an extra £50 most months which i could put towards the DMP which would make my DFD approx 2025 instead of 2031.

Or I could put this towards my mortgage which would reduce my MFD from 2020 to approx 2019

Or I could put this towards my secured loan reducing that date from approx 2024 to 2022.

The reason I'm thinking of putting it towards the mortgage is because that's the soonest date, and the sooner I clear that, the sooner I can start making better headway towards the other debts, sensible or not?

The thought of being in my current financial state for another 15 years is soul destroying, so I'm just trying to figure out a way to improve it. I already do as much overtime as I can safely manage and the chance of a higher paid job is limited.

So all comments welcome.

Sazzie23

I've also posted this in the MFW thread

Sanctioned_Parts_List

To me, paying the DMP off appears to deliver the best return in terms of years per pound.

January2015

Pay it off the secured loan. You will save overall on the total amount paid as you will pay less interest.

You have no intereset on your DMP so leave that as it is and once other loan/mortgage is cleared you can then work towards clearing the DMP.

Clearing secured loan slightly earlier will give you more, once cleared, to pay to DMP. So DMP date may look far away now, but will suddenly get closer once you are paying the loan amount each month on top of the regular DMP payment. Hope this makes sense

Always, always pay off interest charging debts first

asparagus1968

pay off that which charges the highest interest

Sazzie23

January2015 wrote: »

Pay it off the secured loan. You will save overall on the total amount paid as you will pay less interest.

You have no intereset on your DMP so leave that as it is and once other loan/mortgage is cleared you can then work towards clearing the DMP.

Clearing secured loan slightly earlier will give you more, once cleared, to pay to DMP. So DMP date may look far away now, but will suddenly get closer once you are paying the loan amount each month on top of the regular DMP payment. Hope this makes sense

Always, always pay off interest charging debts first

Yeah so you see I'll have already paid off the mortgage by the time the secured loan ends, even with the extra payments to secure loan, so won't see the same financial relief as I'll get from relieving myself of the mortgage early. And then I can put the mortgage payments to the secured loan and a bit to the DMP, shortening both.

I can understand paying extra to the secured loan makes financial sense but life is just not that simple, but maybe it's not going to happen, it's just a theory until I can be sure I can ring fence that money.