Pay off which first? Help please

Bringvaluetome

Good morning all,


First post on here! This may seem like a stupid question however I would like advice as to which to pay off first:


PERSONAL LOAN: £3228 TO DATE @ £154 PER MONTH – FINAL PAYMENT END OF OCT 2021
2.8% INTEREST


CREDIT CARD :£4769 TO DATE @ CURRENTLY £108 PER MONTH – INTEREST FREE UNTIL END OF APRIL 2021 – INTEREST 26.43% (29.9% COMPOUND EQUIVALENT) AFTER THAT PERIOD


Any advice would be greatly appreciated.


Thanks in advance.

[Deleted User]

Hi,


think you should whack your money into the Credit Card and reduce the balance before the very high interest rate kicks in.

Bringvaluetome

Thanks for the reply.


I guess I could shift the credit card debt on to a new card when the interest free period comes up?

middleclassbutpoor

How much have you spare to pay off?

Bringvaluetome

I have about 3k in savings however I need a new car soon. I think it's better to pay cash rather than get in to more debt buying a car.

middleclassbutpoor

Do you have the ability to overpay monthly on either debt?

Bringvaluetome

Circumstances have currently changed and back living with parents. This means I could pay off extra per month. However was unsure which to tackle first and need to put a plan in place.

middleclassbutpoor

I think you should up your monthly payment onto the credit card to £318 per month and ensure the credit card is paid off by then.

Keep £1k back for an emergency fund

Use whatever you need to use from the remaining £2k for a car. If you have any left then chuck this towards the credit card.

If you can afford more than £210 per month extra on top of what you are paying (£318 - £108) I would look to throw this at the credit card still and close it down fully once repaid.

I would then snowball the £318 and loan payment to get that cleared sooner.

https://lemonfool.co.uk/financecalculators/soa.php

Complete the above and see what spare cash you have. If you want to see if there is more that can be squeezed out from your budget then feel free to post and see what people suggest

Bringvaluetome

Middleclass - thank you so much for the in-depth reply.


Just to throw in to the mix, I put £200 a month in to a help to buy ISA. I currently have £2200 in there (that's separate from the £3k savings)

Bringvaluetome

On the Lemonfool list I'm not sure where to put two payments of £25 each for Stocks & Shares ISA & SIPP.


Any help please?

theoretica

I think you can add new categories where they don't have the right ones.