Which of these 2 loans should I reduce/pay off?

happyindebt

I have these 2 loans:
- Hitachi, £16,234. Total left: £14,611 (90%).
- Tesco Bank, £7835. Total left: £5,006 (64%).
Both have the same interest rate and same monthly payment.
I have £5K I can pay towards either of them: should I pay off the Tesco Loan or reduce the Hitachi loan? Does it make a difference to the credit file?
Thank you!

[Deleted User]

It makes little difference, but I would probably clear the Tesco loan for simplicity, on the assumption you can double your payments to the Hitachi loan without penalty.

Clive_Woody

For a moment I thought the APRs were 90% and 64%.......I must learn to read the whole post before jumping to conclusions.

Paully28

If it were me, and they were the same interest rate, i would pay off all of the loan with Tesco, just for ease more than any other reason. 

anto164

Clear the tesco loan and overpay the other.

Less minimum payments each month which gives you flexibiltiy, or protection in case of job loss etc...

Ebe_Scrooge

ZX81 has, as always, hit the nail on the head.  In terms of your credit history, and in terms of hard cash, it'll make no difference.  Paying off the Tesco loan will just mean less "life admin" for you.

The only caveat I might suggest - check the T&Cs of both loans, see if you're allowed to make overpayments without penalty.  If one allows overpayments but the other doesn't, then chuck the £5K at the one that allows overpayments without penalty.

Of course, if they'd both penalise you for overpaying, then you're going to have to do some sums - would the saving in interest outweigh both the penalty plus whatever interest you may be able to earn on the £5K if you put it in some sort of savings account.