How best to pay off this debt?

samwilki

This is a relatively small and new debt which I had to get into due to my dog getting ill, i'm not in financial difficulty and more than able to pay it off but I want to avoid as much interest as possible.

My current debts are:

MBNA - £2894.60 - Interest free until 18/02/2020 then 27.9% - Min Payment £25
Lloyds Loan - £2000 - 24.6% - Min Payment £107.55 - Over 2 years.

After minimum payments i am able to pay a maximum of £300/month to these debts to get them cleared.

What is the best way for me to pay them while trying to decrease interest paid. I have tried a loan consolidation but unable to do that at the minute due to getting a mortgage recently.

Thanks in advance.

kjw327

I’m not an expert but it looks like the obvious answer is to put your extra £300 each month towards the loan. This will pay it off very quickly as your monthly payments would be £407 towards a £2000 loan.

The CC could then be tackled with still a few months left of your interest free period to go. You may then be better placed to shift the balance to another interest free card until it’s cleared.

findingthisdifficult

Assuming you have £432.55 to pay off these loans including your minimum payments, having looked at the snowball calculator, you could pay them both off by February 2020.

Mar - Jul Pay £407.55 to Lloyds and £25 to MBNA
August Pay £47.58 to Lloyds (paid off) and then £384.97 to MBNA
Sept 19 - Jan 20 - pay MBNA £432.55
Feb 20 final payment for MBNA £221.88