Advice with current loan please

D_M_E

Sell car, use proceeds to clear all debt and get an older vehicle - as you work in the motor trade (you don't say trucks or cars or what bit of the trade, selling or mechanics) you could well be in a position where you can acquire a good used car for little money.

DrEskimo

Suffolk04 wrote: »

Thought about selling it as a last resort, it's a 64 plate which I've had since new, so it's cheap to run, reliable and low insurance, where a cheap older car could be a cheap at first, but knowing my luck would need end up being a money pit lol.

My credit card debt is £3,914.97, so I could potentially pay it all by selling the car and have around 2-3k to get something decent

I think you are running out of options...

It's not clear from your budget whether that final £290p/m also covers the £225 you need to spend each month to CC before Sept2020, and whether it includes savings. You also say 'Food, etc.', so if this is also to cover toiletries, clothes, going out, petrol, car maintenance/servicing, presents, haircuts, etc., then you really are going to struggle to stay under budget. The lack of savings for an emergency fund will also result in taking out further credit when an unexpected bill inevitably comes up too...

If clearing the loan and keeping the car is important, then you could look to use the £1,600 LISA and clear it faster, say within 3months. If the extra £340p/m you've now gained helps balance your budget, then you can work next on the CC and clear your debts and keep the car.

The key is getting a well-written budget that covers everything, and a suitable emergency fund built up to save you from taking on more credit.

macman

If you take the cash out of the ISA and do not resave it, then you are effectively losing the £400 tax-free bonus that the Revenue would otherwise give you upon completion. You need a minimum of £1600 to get the 25% tax break.
Not a good idea unless you have no alternative.

Candyapple

macman wrote: »

If you take the cash out of the ISA and do not resave it, then you are effectively losing the £400 tax-free bonus that the Revenue would otherwise give you upon completion. You need a minimum of £1600 to get the 25% tax break.
Not a good idea unless you have no alternative.

Somehow I don't think the OP will be buying anytime soon if they can't even afford to clear a paltry £2.4k debt.

Use the £1.6k in the ISA and clear the debt. Then be really strict for the next couple of months and clear the remaining £800 and then start from scratch building up your ISA savings again. That is the quickest, cheapest debt free route with no faffing about selling your car and buying a cheaper one.

DrEskimo

Candyapple wrote: »

Somehow I don't think the OP will be buying anytime soon if they can't even afford to clear a paltry £2.4k debt.

Use the £1.6k in the ISA and clear the debt. Then be really strict for the next couple of months and clear the remaining £800 and then start from scratch building up your ISA savings again. That is the quickest, cheapest debt free route with no faffing about selling your car and buying a cheaper one.

There is still the £3,900 on the credit card....

I agree about taking out the ISA, but would be more tempted to use £500 of it as a started emergency fund, and the rest towards debt clearance.

Candyapple

DrEskimo wrote: »

There is still the £3,900 on the credit card....

I agree about taking out the ISA, but would be more tempted to use £500 of it as a started emergency fund, and the rest towards debt clearance.

Sorry I missed that part

Advice still stands, use ISA towards debt and sell car and use that to clear cc debt, remainder buy newer cheaper car and anything left over put back into starting ISA savings again.

You would be a fool to consider a loan for £2.5k over x-amount of years.