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Use LISA to pay off DEBT?

JJM236
JJM236 Posts: 15
Third Anniversary First Post
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Hi guys, I have a £5500 loan at (4.9%) and £6500 in a LISA (earning 1%). I believe that due to COVID the penalty for withdrawing a LISA has been lowered to 20% rather than 25%. 
If I withdraw, does this mean I just lose the bonus and none of my own money?
If so, is it advisable to withdraw the LISA and pay the loan off?

Thanks in advance. 

J

Comments

  • MovingForwards
    MovingForwards Posts: 17,183
    Eighth Anniversary 10,000 Posts Name Dropper Photogenic
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    This is your 4th thread across various parts of MSE. Have you read the comments in your other threads?

    You've said in another you have over £1k disposable income per month, so why not leave the LISA as is, put the disposable income into the debt and it will be clear in 5 months, your LISA and bonus will be in tact and the reason for that was also explained in another thread.
    Mortgage started 2020, aiming to clear 31/12/2029.
  • JJM236
    JJM236 Posts: 15
    Third Anniversary First Post
    Forumite
    Yes was not sure where to post. 
    Thanks for your advice.
  • MinuteNoodles
    MinuteNoodles Posts: 1,176
    1,000 Posts Name Dropper
    Forumite
    The advice will not change because it's posted on a different board. In fact it won't change if you posted it on an entirely different personal finance website.
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