WWYD - Pay off the loan or keep saving?
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chocchocshot
Posts: 9 Forumite
Long time lurker, but first time poster.
I have followed this site for years and picked up great tips, so much so, that I now have a very healthy savings pot and hence my question.
Our finances have changed dramatically. We always pay CC's off in full every month; we haven't used our overdraft for almost 3 years. The savings are in an account earning 1.45% till the end of the year (one of Martin's recommended savings accounts) :money:
My husband has a loan with Zopa; 2.9% on a 3 year deal. He is 20 months in and we have a savings pot that will clear this and leave a good Emergency fund + good chunk of savings. I will be receiving a bonus in December between £3k-£4k (last year was £5k - hoping for the same again, but going with the average of previous years). I also have shares available at the end of the November which I can access and this is currently £3.5k (I know I can't rely on this as share price goes up and down).
His view is leave the loan run the course - "we have already paid the majority of the interest; there is no point in doing this" is his argument; however I would like to pay this off by the end of the calendar year and start 2020 debt free.
We started with around £30k of debt at its highest; we are now left with £6200.44 made up of his loan and £1264.11 on a 0% credit card.
What is the best course of action? leave the loan to run the course or just get rid? (Would also be getting rid of the 0% card too which based on current scheduled payments will be gone by May 2020 if I don't pay it off as I have been chucking it all at the savings account).
I have followed this site for years and picked up great tips, so much so, that I now have a very healthy savings pot and hence my question.
Our finances have changed dramatically. We always pay CC's off in full every month; we haven't used our overdraft for almost 3 years. The savings are in an account earning 1.45% till the end of the year (one of Martin's recommended savings accounts) :money:
My husband has a loan with Zopa; 2.9% on a 3 year deal. He is 20 months in and we have a savings pot that will clear this and leave a good Emergency fund + good chunk of savings. I will be receiving a bonus in December between £3k-£4k (last year was £5k - hoping for the same again, but going with the average of previous years). I also have shares available at the end of the November which I can access and this is currently £3.5k (I know I can't rely on this as share price goes up and down).
His view is leave the loan run the course - "we have already paid the majority of the interest; there is no point in doing this" is his argument; however I would like to pay this off by the end of the calendar year and start 2020 debt free.
We started with around £30k of debt at its highest; we are now left with £6200.44 made up of his loan and £1264.11 on a 0% credit card.
What is the best course of action? leave the loan to run the course or just get rid? (Would also be getting rid of the 0% card too which based on current scheduled payments will be gone by May 2020 if I don't pay it off as I have been chucking it all at the savings account).
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Comments
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Personally I would pay off the loan now and pay off the card at a rate of minimum payment + £1 until the end of the 0% period then pay it all off. This will then mean you pay the least interest on the loan and get the most interest from your savings. No point in paying interest on a loan when you don't need too, it's just wasting money for nothing.0
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What is the best course of action?
Check the terms. Always check the terms.
Unless there is a provision within the agreement to terminate (i.e. break) the contract early then let it run its course. There may be costs in terminating.Unlike some here, I am not omniscient. If I am wrong correct me. I won't take offence.
The law is like an ocean - have a swim but don't drown.0
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