what to pay off first?

smiler289

Hi!

Just looking for some advice.

I have a 36 month loan that currently stands at approx £8000, paying monthly sum of £278. Am 5 months into paying the loan.

I also have a credit card with a balance of £1500, its 0% interest until september.

I take home approx £1500 a month in wages but cant seam to get out of my overdraft, am usually around £2000 overdrawn at the end of every month. However I do have £6500 savings, £4500 of which is in an isa and the rest in a more regular account.

Do you reckon I should use some of my savings to clear my overdraft and continue paying my loan and credit card as normal and swop any credit left on my card onto another 0% card when the time comes?

My original plan was to pay my loan off early at £7000, I estimated I would have to save up another £500 to pay it off and would do that easily, however there have been some unforseen bills, mainly with my car that I bought with the loan, main reason why I've been in my overdraft. I know I would incur 2 months worth of charges for paying the loan off early which I didnt mind. It would seam that this option might not be viable now due to extra unforseen bills.

Just wanted some opinions on what to do?

Cheers

James

always_amazed

Hey;
What's the interest on your OD? And are you quite able to get 0% credit after sept for what you have left?

I know very little about loans; does it have an early exit/overpayment fee??

angelavdavis

Once you are able to answer the questions posed by always_amazed, go over to the snowball calculator and enter your debts, interest rates and available cash and it will pinpoint what to pay and in what order to help you make the decision. It is basically based on interest rates, etc but is a good method to use.

madmich666

Just a quick thought with the loan. Ive got a loan with lloyds and they said that if i paid the whole lot off early i would be charged but if i paid off most of it leaving one or two months payments then I wouldn't be charged. I dont know if that works for your loan.