What to Pay Off ..Almost there

MammaCM

Hi there,

I have been looking for advice for repaying my debt, I understand paying off the highest interest & snowball but this is my situation.
I am self employed hence the business loans

My debts
3k Credit Card - Interest Free for another 3 years
8.7k Loan - 5.20% (£325 per mth)(1.5 year left)
£22,146.73 Funding Circle (Business Loan)(£688 per mth) 7.50 % (applied to the loan amount at the outset to calculate the interest due on each repayment date)( 3 years left)
5.8k Loan (5%) (£267 per mth) (Business Loan) ( will be re-payed this year 2019)

I by April will hopefully find myself in a situation that I would of have about 17k available to put to my debts :T
I don't know the best thing to do, I am the nearest to paying off the 22k of Funding Circle I will be for a while, note that no part payments are allowed it would need to be re-payed in full to settle this. It would make me £688 better off

Or I do have enough to repay all my other debts

I worry that I may miss this opportunity to re-pay the largest most difficult debt, repaying the others would be so so satisfying and make me £600 better off, I can't ignore that I am borrowed time with my credit card to.

Any advice would be much appreciated :money:

thanks

EssexHebridean

I may be missing something here but 22,146 - £2064 (3 x monthly payment) =20,082 - so the 17k won't clear it? Is the settlement figure on it (allowing for refund of interest) within that 17k? Also on the final loan - you say it'll be paid this year but at £267 a month I can't quite see how? Actually, now I come to think about it, the maths on the 8k loan doesn't look to work out either.

Alternatively - pay off all the other debts leaving the biggie, then you have £592 a month (plus the CC min payment which you don't specify above - probably another £50 ish?) which you can save towards clearing funding circle in one big lump? What are the settlement figures on the other two loans?

The situation is slightly skewed here by the front-loaded interest on the FC loan - yes on paper it's the highest interest, but it may not work to clear it as you're thinking.

Stop thinking in terms of the extra money making you "better off" though - while there is still other debt there it's still not your money!

MammaCM

Essex,

I do need to check this term dates of these loans, I have assumed these dates based on when I took them out :mad:

I do need to request my settlement figures

I know the 17k doesn't settle the £22k but I feel like its the closest that I will get to a lump near this amount, a bit more saving and I could have it all to use and pay it off.

Whilst the alternative is that this loan will run for another 3 years, even if I am saving along site it, it a mountain for me to repay any earlier.

But thinking about it again...logically ... You are correct in that I could save (the new surplus) along side re-paying this loan and hopefully they should meet in the middle earlier than the term.

The amont and terms of this loan just bother me... but hey ...thats what I signed

Thank you

EssexHebridean

If there is slack in the budget that you could also pay to the debts then that's a whole different (and potentially very good!) picture. Full SOA perhaps, post it in here, and let's see what we can all work out?

redux

I'd be trying hard to clear the higher interest large one, and it certainly doesn't make sense to pay the zero interest one back first.

As above, you'd have paid that down to £20k in 3 months time, and the settlement will discount about £1000, so you're looking for about £2k on top of the £17k.

You could consider waiting 3 months longer i.e. to 6 from now to do that settlement, or would it be possible to raise a new loan of say £2k5 to add to your £17 to clear the large in 3 months, or perhaps temporarily run up this on a credit card? Even 20% or 30% annual interest on £2000 is cheaper than 7.5% on £22,000, and it can be cleared again in 3 or 4 months from your £688 less outgoing.

enthusiasticsaver

You need a settlement figure on that funding circle loan first to see whether you have to save more to add to the £17k and second to see if it is worthwhile paying it off early at all. If the interest was front loaded and there is no refund on interest for early settlement I would pay the other debts off. That would give you £592 plus the credit card payments each month to save until you get to the point where the savings are enough to pay off the funding circle loan.

redux

enthusiasticsaver wrote: »

You need a settlement figure on that funding circle loan first to see whether you have to save more to add to the £17k and second to see if it is worthwhile paying it off early at all. If the interest was front loaded and there is no refund on interest for early settlement I would pay the other debts off. That would give you £592 plus the credit card payments each month to save until you get to the point where the savings are enough to pay off the funding circle loan.

Their website says interest charged until the end of the month of repayment, and gives an example showing interest saved.

https://support.fundingcircle.com/hc/en-us/articles/214639526-Can-my-business-pay-back-a-loan-early-e?mobile_site=true

EssexHebridean

enthusiasticsaver wrote: »

You need a settlement figure on that funding circle loan first to see whether you have to save more to add to the £17k and second to see if it is worthwhile paying it off early at all. If the interest was front loaded and there is no refund on interest for early settlement I would pay the other debts off. That would give you £592 plus the credit card payments each month to save until you get to the point where the savings are enough to pay off the funding circle loan.

If no refund for early repayment then I'd go further and say clear off the other stuff, then just keep making the contractual payments to FC, while stashing anything else into savings paying the highest interest you can find for your accessibility requirements. In that instance there is no benefit to paying off ahead of the end of the term of the loan.

MammaCM

Thanks for all your replies ��

Enthusiasm..

I am not sure if I am front loaded, I am looking at my settlement table and for each month, it gives me a line of ..

For Example this is April 19

Post Payment 19,924
Principle £128.03
Interest £560.80

The principle goes up over the term
Interest goes down over the term