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I think I'm right...?...to pay off or not
Comments
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Yes - all things being equal the higher rate on the savings trumps the rate on the loan.
Remember you could have tax to pay on the interest on your savings, which might change the picture. That depends on your tax rate and the amount of interest you earn.3 -
Thank you
That's what I thought
Now I have to figure out when we start paying tax on the interest...0 -
You pay tax on the interest once you exceed your £1K Savings Allowance. Unless you invest it in an ISA, which is tax-free.
This assumes you have other income which exceeds your Personal Allowance.No free lunch, and no free laptop
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And assumes you have a personal allowance, which you don't if you are a additional rate tax payer (if you are a higher rate tax payer it's £500).macman said:You pay tax on the interest once you exceed your £1K Savings Allowance. Unless you invest it in an ISA, which is tax-free.
This assumes you have other income which exceeds your Personal Allowance.
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I'd pay off the loan if it were me. Maybe that's because I've been through a DRO in the past and too much debt scares me. The loan will, of course, remain on your credit reports until it's paid off.
As I said, I would pay it off and then start saving again. It's only £3k and if you can get rid of it, then do.
Of course, just my own opinion. It doesn't seem that you're going to gain a lot by not paying it.Please note - taken from the Forum Rules and amended for my own personal use (with thanks) : It is up to you to investigate, check, double-check and check yet again before you make any decisions or take any action based on any information you glean from any of my posts. Although I do carry out careful research before posting and never intend to mislead or supply out-of-date or incorrect information, please do not rely 100% on what you are reading. Verify everything in order to protect yourself as you are responsible for any action you consequently take.2 -
Most people aren't you and can handle debt without losing their minds and going bankrupt.MalMonroe said:I'd pay off the loan if it were me. Maybe that's because I've been through a DRO in the past and too much debt scares me. The loan will, of course, remain on your credit reports until it's paid off.
As I said, I would pay it off and then start saving again. It's only £3k and if you can get rid of it, then do.
Of course, just my own opinion. It doesn't seem that you're going to gain a lot by not paying it.0 -
I would pay off any debt if it were me. Then focus on your savings and other plans.#96 Save 12k in 2021, £11, 000 / £10,000 saved in 2021
#13 Save 12k in 2022, £7151.96 / £12,000
#52 Save 12k in 2023, £0 / £12,000
3-6 month emergency fund £10,000
House Downpayment £7151.96 / £20,0001 -
Interest rate is climbing up and up.1
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