2 credit cards and 2 loans, which to work on getting rid of first?

[Deleted User]

Hi All,

I'm making big cut backs and really trying to tackle my debt but I don't have much to put towards it at the moment. I have been struggling to stay a float but with some major cut backs I could have cleared up about an extra £50 (And any more I can scrape together also) to pay on top of my regular payments towards debt, if I list the balance, current payments and interest rates I am hoping someone can help me to decide which way to tackle this.

The mathematician in me wants to tackle the highest interest first, but after reading Dave Ramsey's Money Makeover he says to start with the smallest to free up cash to put more towards the big ones (Snowball?).

Credit Card 1 - Limit £4,900 - Balance £4,802.31 - Payment £105pm (Min) - Interest 26.9%
Credit Card 2 - Limit £3,500 - Balance £3,344.48 - Payment £85pm (Min) - Interest 18.9%
Loan 1 - Initial Value £5,425 - Balance £2,983.53 - Payment £90.41pm - Interest 10.10%
Loan 2** - Initial Value £1,500 - Balance £1,359.40 - Payment £20pw - Interest 12.68%(Applied weekly at time of payment, not included in balance)

**Loan 2 is a credit union loan, I actually have £661.99 in my savings which I can put towards this to pay it off leaving the actual balance as £718.61 if savings used to pay off loan.

Thanks for taking the time to look at this, really appreciate it and any advice you could give!

EDIT:

Also, I may be getting £1,000 - £2,000 in the next 2 months from bonus in work plus rebate of marriage tax which I wasn’t aware I was eligible for! So could throw these at some debt if they materialise.

Willing2Learn

Hi there,

While the Dave Ramsey snowball method is good, it definitely is not very MSE as it does not save you the most money, although it does let you see progress quickest.

I recommend busting your debts and starting a snowball rolling using the MSE method, paying down the debts with the highest APR first.

MallyGirl

none of your debts is small enough to tackle with a couple of frugal months so I would focus on the highest APR