Which loan next?

jonnee

Okay some opinions / advice welcome.

I'm about halfway into clearing my 17k debt pile accrued over several years. I'm about to finish clearing my current highest interest loan - a Halifax credit card at 17.5%. Already cleared are a rate setter loan and yet another credit card.

Left to clear from here:

Monzo loan at 10.1% for £3029.98. £101.01 payment.
MBNA Credit card - 0% until December 2023. 20.5% After December. Minimum payment £50 / month
PRA Group - default balance of £3946.79. No interest unless I'm missing something. Payment plan of £80 / month.

After I've paid off Halifax, I'll have £512 / month total to put towards clearing this (trust me, this is the limit, I have made so many cutbacks already to get to this point). The minimum payments for the three are £331.01, meaning I've £180.99. This amount is likely to go up a bit soon too - waiting for a salary review from work.

Up to here it's been obvious but now I'm a bit stuck as to which one to put the extra money towards.

PRA Group - no interest, but it weighs heavily on me credit report as it shows as being over the 'limit' and reports each month as a default balance.
Monzo Loan - the highest interest rate at the moment
MBNA - No interest at the moment, but the interest free period expires in December. With a current credit score of 550 on Transunion I feel I'm unlikely to get another balance transfer offer? Although that score might go up before then. It's very hard to tell.

I just got a mortgage renewed (phew) so apart from transferring these loans to whatever interest rate is best I won't need to apply for any credit for two more years (by which time this pile should finally be paid off).

Which one should I be putting the extra into next? Any ideas?

jonnee

I can't edit this but I left the MBRA balance out - it's £1569

kimwp

If your PRA account is defaulted, I think it will stay on your account until six years after the default, regardless of when you pay it off. 

I haven't done any calculations, but I think I would-
1. See if PRA will accept a smaller amount
2. Put all the spare money towards the 10.1% Monzo loan (assuming no penalties for overpayment/early repayment)
3. Pick a point to switch to overpaying the MBNA card- somewhere between in time to pay it off by the end of the 0% period and when the 0% period ends.

badmemory

You only have 5 months before the MBNA goes up & with the now free £280.99 (not £180.99??) you can just about clear it by then ith about £80 spare.  Is the Monzo loan rate likely to go up or is it fixed?

TheAble

This is one of those wrinkles where you have a 0% cc which is soon going to become expensive. I'd be tempted to focus on that.

Also take a look at the Monzo terms for overpayment penalties and factor those into your calculations.

jonnee

Thanks both. I did forget to mention - no early repayment on Monzo and the rate is fixed.

flipflopflo

As the MBNA 0% deal finishes in December then I would throw everything at that. If you have £180 plus the £50 then it will take  around 7 months to pay off completely with your current payments. 

RAS

Clear the MBNA card off first as it will cost you most if you don't clear it by the time the deal ends.

The debt with PRA is already defaulted so that's going to sit there for 6 years whatever you do. PRA aren't known for accepting discounted full and finals. How much "over the limit " is that debt?