paying off a loan

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i have a loan with abbey which i am paying 14.9% interest. by january i will be in a position where it is my only debt. it runs for 5 years and was for £5000. at present i pay £116.26 per month. i took this loan out in january of this year.

by next jan i will be able to pay about £600 extra per month not including the normal payment.

my question is .... is it worth doing this? yes i would like to be totally debt free but should i just let the loan run its term? or hammer it with extra payments?

at the moment my credit rating is very poor. as of may i had 6 debts (not huge) in june i payed one off. july and august will see another 3 gone and sept one more leaving just the loan...i have been doing this using the snowball principal, so therefore i assume that 0% cards and the like are not available to me and really dont want to have anymore searches on my report...any advice would be appreciated. many thanks
November NSD's - 7

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  • debtbuster2K5
    debtbuster2K5 Posts: 1,515 Forumite
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    Hi,

    Is the loan a flexible one?. Are you able to make additional payments and is the loan front loaded? Ie has all the interest been charged upfront.

    All of these factors are practical ones that may prevent you from overpaying, but in principle...Yes pay it off as quick as possible. You can not earn anywhere near 14.9% in savings accounts so get it gone and quickly.

    Finally, although you may think you have a bad credit rating, it would be worth getting hold of a copy, as it seems that you have conducted your affairs very sensibly over the recent past. Loans etc being paid off is a good thing for your history as it shows that you are able to meet your commitments, so dont rule out applying for a 0% card, just check your record first..

    Regards
    24 hours in a day. 24 beers in a case ... coincidence? :beer:
  • JAMIEDODGER
    JAMIEDODGER Posts: 4,339 Forumite
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    DB hi and thanks for your reply...yes the interest has been put on at the beggining and its not flexible. do you know what a reasonable credit score is? what am i looking for to know if it is a good enough score to get a 0% cc?
    November NSD's - 7
  • debtbuster2K5
    debtbuster2K5 Posts: 1,515 Forumite
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    DB hi and thanks for your reply...yes the interest has been put on at the beggining and its not flexible. do you know what a reasonable credit score is? what am i looking for to know if it is a good enough score to get a 0% cc?

    Hi,

    Not really sure about your rating question, however if you have been paying off accounts, closing them and not applying for loads of new loans/cards then you should be ok.

    Do you have any history of CCJ`S, arrears or late payments, because they will not help.

    Also make sure you are on the electoral roll.


    Regards
    24 hours in a day. 24 beers in a case ... coincidence? :beer:
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