Barclayloan / Credit Card / Advice

Ultimatechezz

Hi all,

I have a 2 Barclay loans & a credit card with a total of £27600 (about £600pm)

Not a great situation really, some business debt (£2000) some from relocating to Cumbria and a new car!

£10,500 is for a car I bought as I have to commute to manchester and back twice a week. My old car was 10 years old and didn't fancy making the long trips each week!

Both loans have 4 years to go. I do feel aabout worried about it all and the Mrs is going on about buying a house, which I think is impossible! This year I have managed to save about £150/200 buy being ruthless as I want to pay off as soon as possible.

so, my questions are

1. one loan is £235 a month, the other is £265. If I over pay the most expensive loan does this reduce the term in years or the overall monthly payment? Can't seem to find out.

2. Would it make more sense to pay off credit card of £70pm to reduce that?

3. Would it make sense if I could get a loan from a lender which allows a 2 month payment holiday from the start, take it out for 4 years and use the £500 I would save from this to pay off some of the credit card?

4. I have £25000 which was from the sale of our house. I wanted to pay off my debts with this, then pay off the Mrs debts, then save up the money again for a house deposit, but the Mrs won't have it!

Any ideas/Advice would be much appreciated

Thanks

Steve

Pixie5740

Try plugging some figures into this Snowball Calculator to work out which would be the cheapest and fastest way to repay your debts.

http://www.stoozing.com/calculator/snowball-calculator.php

1. Usually overpaying a loan reduces the term rather than the monthly payments but you'd need to check the T&C and factor in any ERC.

2. Is the CC debt more expensive than the loan debt? If so pay if off first. You also feel good after repaying a debt.

3. Probably not.

4. Your debt will impact your mortgage affordability. Play around with some online mortgage calculators to see if it's even feasible for you to get a large enough mortgage with your current levels of debt. If not then you might be better off using the £25k to repay your debts and start saving again. Rent in Cumbria and the HPI will also form part of the decision though.

CLAPTON

Ultimatechezz wrote: »

Hi all,

I have a 2 Barclay loans & a credit card with a total of £27600 (about £600pm)

Not a great situation really, some business debt (£2000) some from relocating to Cumbria and a new car!

£10,500 is for a car I bought as I have to commute to manchester and back twice a week. My old car was 10 years old and didn't fancy making the long trips each week!

Both loans have 4 years to go. I do feel aabout worried about it all and the Mrs is going on about buying a house, which I think is impossible! This year I have managed to save about £150/200 buy being ruthless as I want to pay off as soon as possible.

so, my questions are

1. one loan is £235 a month, the other is £265. If I over pay the most expensive loan does this reduce the term in years or the overall monthly payment? Can't seem to find out.

2. Would it make more sense to pay off credit card of £70pm to reduce that?

3. Would it make sense if I could get a loan from a lender which allows a 2 month payment holiday from the start, take it out for 4 years and use the £500 I would save from this to pay off some of the credit card?

4. I have £25000 which was from the sale of our house. I wanted to pay off my debts with this, then pay off the Mrs debts, then save up the money again for a house deposit, but the Mrs won't have it!

Any ideas/Advice would be much appreciated

Thanks

Steve

pay off the debt(s) with the highest APR first as this saves the most interest

rethink your priorities : 10,500 for a car is totally un-necessary , there are loads of good cars for 3k

Ultimatechezz

I have the credit card debt on 0% at the moment, I suppose I can keep swapping that each time.

The £265 one Id love to pay off faster as that's the highest monthly amount.

I did spend alot on the car granted, but travelling too and from Cumbria is a big trip and Iv done about 20,000 this year, but it's a diesel, £30 tax so i'm saving money there in some respect! I didn't want get an older car and have issues each month replacing this and that or breaking down over winter which is bleak over shap! (not that that would necessarily happen)

Cheers

Steve

fruitisbad

Use the savings!

I know it's horrible to get rid of a chunk of it, but if you use it, then pay your savings pot back with all the money you're not spending on repayments and most importantly interest. you'll be better off overall

Ultimatechezz

I would like to use the savings but the Mrs won't budge. I said that that could pay off my debts, then with the free £600 Id have spare I would give that to her to pay what she owes on stuff, then start saving...

either way though, it's 4 years of either saving or paying I suppose!?! Either with or without interest...

Pixie5740

It looks like it. It's a shame your wife won't use the savings to clear the debts and then start saving again since earning interest on your savings rather than paying interest on your debts will be cheaper which will put you in the position of either having a larger deposit or buying a house sooner.

Are you any good with spreadsheets? Could you plug some numbers into one to show her the benefits of clearing the debts and then saving a deposit?

CLAPTON

Ultimatechezz wrote: »

I have the credit card debt on 0% at the moment, I suppose I can keep swapping that each time.

The £265 one Id love to pay off faster as that's the highest monthly amount.

I did spend alot on the car granted, but travelling too and from Cumbria is a big trip and Iv done about 20,000 this year, but it's a diesel, £30 tax so i'm saving money there in some respect! I didn't want get an older car and have issues each month replacing this and that or breaking down over winter which is bleak over shap! (not that that would necessarily happen)

Cheers

Steve

I've always preferred to spend on houses rather than cars
I've never spent more than 5k on a car and I do about 20k miles per year and have done for about 30 years
I have never broken down although I have had to spend a bit at MOT time

all a matter of priorities

Ultimatechezz

I suppose at the time, the Mrs was offered a job just before Christmas, with a march start, in that time we sold the house and rented a 2 bed bungalow in a nice area close to the motorway and schools etc (was in a 3 bed house)

I think it was all in more of a rush really when I think about it, moving and travelling has added some debt as well as a little business I have (on back burner at the moment)

I could sell the car and buy a cheaper car maybe in future.

Just wondering if there is a calculator somewhere which shows how much the loan term would reduce if I was over paying.

I'll keep on at the mrs, shown here loads of scenarios where we could be debt free and save up after that...it's almost like she would rather get a cheaper house not where we want to live rather than pay off and save back up for where we live now!

ill keep working on it though!

Pixie5740

You mean like the link I gave you earlier?

Ultimatechezz

Well, kind of exactly like that actual one...yes!

Was just wondering of the bank had an official one from there point of view, charges etc

but that will do, thanks

Steve