Which debts do I pay off first?!

davidevans123

All very helpful stuff indeed. It now looks like it may be £23000.00 (its all from an inheritance) and which case I dont know whether I should clear my big loan as that would free up £680.00 a month?

kindofagilr

davidevans123 wrote: »

OK thank you and apologies guys.

Lloyds (opened May 2015) : £24000.00 left (Payment : £680.00 p/m) 4.5 years left. 24% If they allow overpayments, the leftover on this one
Barclaycard (opened May 2014) : £8500.00 (Payment : £190.00 p/m) 16.9% Fifth
AvantCredit Loan (opened Nov 2015) : £2300.00 left (Payment : £78.00 p/m) 4.5 years left 25%+. - This one First
Capital One (opened around 2003) : £2400.00 (Payment : £75.00 p/m) 16% Third
Debenhams Store Card (opened 2014) : £450.00 (Payment : £16.00 p/m) 24% Fourth
Capital One card 2 (opened March 2016) : £130.00 (Payment : £5.00 p/m). 29% - Second

Hope this helps. Thank you

I've put in red what I would do xx

kindofagilr

davidevans123 wrote: »

All very helpful stuff indeed. It now looks like it may be £23000.00 (its all from an inheritance) and which case I dont know whether I should clear my big loan as that would free up £680.00 a month?

Just read this, in that case I would do that, take the big one out, then pay as much as you can to the other loan

And check for 0% cards on the calculator on here so move the rest to 0% cards.

bargainbetty

If you clear all the smaller debts (several of which are very high interest) you can reduce your outgoings significantly and cancel the accounts. Make sure you do this so you don't run them up again.


Use the remainder to pay a chunk off the fixed loan, give it three-six months and then see if you qualify for a better interest rate to refinance what is left of the loan.


The important thing is to make sure you do not run up the debts again, so make sure you have a budget in place for your new larger disposable income

leicestersq

OK thank you and apologies guys.

Lloyds (opened May 2015) : £24000.00 left (Payment : £680.00 p/m) 4.5 years left. 24%
Barclaycard (opened May 2014) : £8500.00 (Payment : £190.00 p/m) 16.9%
AvantCredit Loan (opened Nov 2015) : £2300.00 left (Payment : £78.00 p/m) 4.5 years left 25%+.
Capital One (opened around 2003) : £2400.00 (Payment : £75.00 p/m) 16%
Debenhams Store Card (opened 2014) : £450.00 (Payment : £16.00 p/m) 24%
Capital One card 2 (opened March 2016) : £130.00 (Payment : £5.00 p/m). 29%

The rule is simple, pay back the ones with the highest rate of interest first. As said elsewhere, Avant and Capital one get cleared first.

Then I see your point about the Lloyds loan, because by repaying it, you will still be facing the same payment each month. Well, you need to think about borrowing money and time itself as a combined thing. Time and money are related. Your objective here should be to clear all of your debts in the shortest possible time, so that you have more time earning money for yourself and not for the moneylenders.

If you pay back the Lloyds loan, the term of the loan will shorten. That means that sometime much sooner the Lloyds bank loan is cleared. Instead of 4.5 years of paying £680 a month, you might have just one year of doing this. Then you have three point five years of enjoying an extra £680 a month cash that you wouldnt have had otherwise.

And this is the correct route to take, tough it out and pay back the LLoyds loan next. If you do that, you will find that the time needed to repay and clear all these debts will be shorter than if you take any other route.

datlex

If you have £18K I would clear all the small debts. You will then be left with just over 4K towards the lloyds loan. You need to check if you can actually make a lump sump payment to it. If you just pay off the loan you are still left with monthly outgoings as your loan agreement specifies the monthly payments. Clearing the rest will reduce your monthly payments, you can then close any you don't need.