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Advice please would be great

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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.

Comments

  • RobM99
    RobM99 Posts: 2,709 Forumite
    Eighth Anniversary 1,000 Posts Photogenic Name Dropper
    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!
    Now a gainfully employed bassist again - WooHoo!
  • leninspot
    leninspot Posts: 85 Forumite
    Fifth 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?
  • sourcrates
    sourcrates Posts: 31,565 Ambassador
    Part of the Furniture 10,000 Posts I've been Money Tipped! Name Dropper
    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 Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • sharpe106
    sharpe106 Posts: 3,558 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    If you want some advice on budgeting etc complete  a SOA

    https://www.lemonfool.co.uk/financecalculators/soa.php
  • RAS
    RAS Posts: 35,604 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    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.
    If you've have not made a mistake, you've made nothing
  • 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 :)
    DFD March 2025 (£35000 paid off)
    FFEF £10000/20000 saved
  • 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
  • theoretica
    theoretica Posts: 12,691 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    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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