What to pay first?

Rijeka

help, not sure in what order I should pay things off!

I have:

£19k on loan at 7.3% term left 52 mths
£61k mortgage 5.74% term left 102 mths (.74% above base rate for term)
£239k mortgage 4.75% for 9 mths. Then will have to remortgage!
£13k credit card 0% for 12 mths

I have £6k to £8k in savings and isa's to put somewhere. Then I intend to reduce pension payment and stop savings payments which will give me £400 additional a month to over pay.

My plan was to pay off loan first using savings and additional monthly payments. Then use money from monthly loan payment and additional to attack £61k mortgage hopefully will have about £25k equity to aid this early next year.

What to do - what to do?

clearmydebts

Hiya,

I think I would tackle the loan first if I was you. Then I would think about the credit cards as the 0% balance transfer only lasts 12 months. I'm sure someone more savvy than me will be along to advise shortly though!

beer_tins

Are there any early repayment charges for the mortgages or for the loan? Or is there a limit in what you can overpay on them without incurring charges?

Arlen

Do a snowball calculator

http://www.whatsthecost.com/snowball.aspx

This will tell you which debts to pay first.

beer_tins

Also, when does the 0% deal run out on your cc? Would you be able to move to another 0% cc?

Rijeka

Small admin fee on loan. nothing else.

Rijeka

0% runs out in May 09 and would easily be able to transfer to another card. Could also get additional £12k at 0% on this card and was thinking to start stoozing by puutting against mortgage as it is offset.

beer_tins

Well, if you think you can move the cc debt to another card at 0%, throw it at the loan (only a small fee you say, though I'm not sure how small!). If you don't think you can get another 0% cc I would actually try to pay that off before it reverts to the standard rate, higher than any of the other rates.

beer_tins

Seeing as you don't have high charges for overpayment and no problem getting another 0% card, I would pay these off highest interest first. Stoozing can save you paying interest, though some find it hard to manage it all, as it takes pretty good organisation.

Rijeka

beinerts wrote: »

Seeing as you don't have high charges for overpayment and no problem getting another 0% card, I would pay these off highest interest first. Stoozing can save you paying interest, though some find it hard to manage it all, as it takes pretty good organisation.

Thanks, this was my feeling but good to get someone else's opinion.:beer:

GeorgeUK

I would overpay on the loan, or if possible, get a 0% card that does a super balance transfer (SBT) such as virgin (0% for 15 months, 2.98% BT fee and 1st min payment 3%. 2nd-15th min is £25). There may be an early settlement fee but if you're allowed to overpay then you should be able to do a balance transfer to clear the loan and have this on a 0% card instead.

The SBT allows you to transfer to a CC or current account so you could take a chunk out of the loan for 0% if getting 0% cards is not a problem.