Should I clear OD or Loan???

paul-c-88

Hi,

This post might cover a couple of things. Please advise me if people think it is not the correct place

I am a first time buyer and my wife and I will be looking to get a mortgage in the near future.

Thing is, I have an overdraft of £1650 and am currently repaying £141p/m to pay off a personal loan which I have £717 left to pay off.

I am approaching a bonus payment in work and I am also due about £800 (before tax) in overtime.

I am wondering if these debt amounts will affect my mortgage application and which would be better to pay off before making an application?

Quite the newbie on a lot of this stuff so please be patient if this is a silly question!

Thanks

National_Debtline

Hi

I’m not sure whether paying off one or the other would have a particular impact on a mortgage application, but it makes financial sense to pay the debt which costs you the most in interest.

James
@natdebtline

enjoyyourshoes

I bet the OD costs you packet once you have added in their monthly costs, weekly or daily charges plus their interest rate.

The loan may charge you an early repayment charge if you pay early, check with them.

I would always pay off OD because their hidden charges sting you.

Need to start reconciling your bank account daily with all daily costs and account for all 'monthly charges SO/DD the like' & accrue any annual, 1/2 & 1/4ly bills, this way you can keep out of OD and keep track spending and start managing your finches to meet you own financial envelope. This will stand you in good stead once you have more responsibilities, if not the cost can easily run out of control, as you may not have control over your finances