Advice on which debts to clear

Frogdad

Hi, I have a few small amount of debt I would like to clear in the most economical way possible. Ill try and post it so its understandable below.

Car loan £1905 14% apr
CC £800 0% until feb 2019 then 20% apr
CC £1500 0% until 2021
Store Credit £600 0% until feb 2019 then 19%apr

I should have £1000 to use by next payday (20th) but would like to keep some as buffer emergency funds. If I try and pay car loan off I am gong to get hit with high APR on CC and SC or should I clear these before 0% runs out (except the £1500 long 0%). I should be able to pay a few hundred a month towards paying this off.

National_Debtline

Hi Frogdad,


Initially I would ask you to post your SOA. If this lump sum is a one off, but the normal payments are manageable, you may split the lump sum between several of the debts and then continue to pay them monthly (as you have been). Hopefully this would allow you to try and clear the cards before the interest free period ends, or as near to that as possible.


Also, what sort of car loan is this please? Is it a loan from the bank or is it subject to hire purchase/ conditional sale? If it is the later then it could have a lump sum payment at the end of the agreement that needs to be paid in order to keep the car, so another option could be to save the lump sum to pay towards this rather than trading the car in.


For more money advice you could try speaking to the Money Advice Service - 0800 138 7777.


Laura
@natdebtline

datlex

Frogdad wrote: »

Hi, I have a few small amount of debt I would like to clear in the most economical way possible. Ill try and post it so its understandable below.

Car loan £1905 14% apr
CC £800 0% until feb 2019 then 20% apr
CC £1500 0% until 2021
Store Credit £600 0% until feb 2019 then 19%apr

I should have £1000 to use by next payday (20th) but would like to keep some as buffer emergency funds. If I try and pay car loan off I am gong to get hit with high APR on CC and SC or should I clear these before 0% runs out (except the £1500 long 0%). I should be able to pay a few hundred a month towards paying this off.

If you use £600 of the £1000 you would be able to clear the Store credit and have £400 for emergency fund.

With loans you need to check what the settlement figure is, it is not as simple as just paying the balance.

Frogdad

The loan is just a personal loan with my bank (barclays) I think there is a small fee of around £20 to pay it off early. I am tempted to clear the SC (currys) and then the CC that has 0% ending soon. That should giver me some time to pay off the loan (which has the lowest apr) and then I have 32 months 0% on the other CC?

PTG

I would clear the £600 SC and save the £400. Meanwhile saving payments that would be going to the SC to save a further £400 up until jan 2019 then clear the £800 CC before the 0% is up. Payments from SC&CC put aside so another lump some can be paid for the car loan. Once car loan paid focus on long CC which has a while left on it. That being said everything written down is easier than actually implementing it.

redux

If you can put £3000 to £3500 towards these by February or March then you don't really have a problem.

Pay a quid or two above monthly minimums on the cards and hit the loan first, then clear the two earlier expiring 0% offers in Feb/Mch/Apr. 19% apr for a month is better than 14% for 5 or 6 months.

If funding wont be quite that fast then hedge somewhere between, keeping your reserve to start with, but still go towards the loan first.