Pay off Overdraft or Loan.

ffsear

Hi,

I have a £5,000 over draft and a loan on £4,700.

Come October I will be trying to re mortgage my house. I'm on a crappy deal at the moment of 4.99% (only had 5% deposit) and was hoping to get a better deal. My house has gone up 20% in value since I purchased it.

Anyway, I have just got a £5,000 bonus. It terms of my credit file, am I better off paying off the loan, or the overdraft?

Thanks

SinkingFast

Is the overdraft more expensive than the loan?

stclair

I would say overdraft as they are repayable on demand.

20aday

I'd also say the Overdraft too.

In terms of APR I'd imagine the Overdraft has a higher rate of interest?

ffsear

Cheers guys.

As the loan was for home improvements, and the overdraft is basically silly spending, I'm going to pay off the overdraft.

Thanks for the advice.