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Advice please would be great

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DMtryingtobesavvyDMtryingtobesavvy Forumite
2 posts
First Post
MoneySaving Newbie
Afternoon. I am changing jobs and now receiving a lot less salary from September but also received a payment for leaving. I have read other bits related to clearing your debt and want to ensure my long term finances are secure as the new job is for a year. I should be able to raise about 15k and have two large debts apart from mortgage and car. A loan with 16k left and credit card with 8k on it. Thoughts are clear credit card as 22%APR and loan will take four and a half years to pay although costly at 400 a month at 9%. If I clear credit card then will have the remainder in case of no employment next year. Any advice would be welcome.

Replies

  • RobM99RobM99 Forumite
    265 posts
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    Pay highest interest debts up first. £8,000 on a 'normal' credit card will cost £160 a month (roughly) in interest (assuming it's a 2% a month card).  In my opinion!
  • leninspotleninspot Forumite
    81 posts
    Fourth Anniversary 10 Posts
    Could you transfer at least some of your credit card debt to an interest free switch? Even if it saved a little for a few months it all helps?
  • sourcratessourcrates Forumite, Board Guide
    20.9K posts
    Tenth Anniversary 10,000 Posts Name Dropper Photogenic
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    Whatever you choose to do, please try and address the reasons why you ended up with 24k of debt in the first place.
    Better budgeting, and trying to live within your means may stop you from being in this position again, good luck.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File and Ratings, Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to:
    [email protected].
    Any views expressed are mine and not the official line of MoneySavingExpert.com.
    For free debt advice, contact either : Stepchange, National Debtline, CitizensAdviceBureaux.
  • sharpe106sharpe106 Forumite
    3.5K posts
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
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    If you want some advice on budgeting etc complete  a SOA

    https://www.lemonfool.co.uk/financecalculators/soa.php
  • RASRAS Forumite
    28.6K posts
    Part of the Furniture 10,000 Posts
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    Whatever you choose to do, please try and address the reasons why you ended up with 24k of debt in the first place.
    Better budgeting, and trying to live within your means may stop you from being in this position again, good luck.
    And check any early redemption penalties on the loan and include that information in the SOA.
    The person who has not made a mistake, has made nothing
  • ohdearhowdidthathappenohdearhowdidthathappen Forumite
    677 posts
    500 Posts Name Dropper First Anniversary
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    If you can't raise another £1k to clear the loan, then I'd definitely pay off the credit card.  You don't say what your income vs expenditure is with your new job.  If you do a budget and can manage your outgoings on your new income, then I'd put £1K into savings as an emergency fund and put the other £6K towards paying the loan off early (if there are no penalties).  You'll have the money you'd usually pay into the credit card spare too to save towards clearing it.
    Good luck :)
    Debt Dec '18 £45393. Debt free June 2020
    New savings goals: House renovations £0/£15000, FFEF £0/£15000
    Mortgage June 2020: £340K, aim to OP £350 per month minimum.
  • DMtryingtobesavvyDMtryingtobesavvy Forumite
    2 posts
    First Post
    MoneySaving Newbie
    Thanks all, if I was able to raise the 1k would you consider paying the loan off first. Getting some financial advisor as well but always value a range of advice. I could then look to focus on clearing the credit card after sorting the loan. Take care all
  • theoreticatheoretica Forumite
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    The credit card is costing you the most interest - pay it off first.  The lure of paying off the loan is getting rid of those monthly payments, but you need to keep your payments to debt up to get rid of it all, not be tempted by easier cash flow to spend more.
    But a banker, engaged at enormous expense,
    Had the whole of their cash in his care.
    Lewis Carroll
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