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  • FIRST POST
    • FatCat14
    • By FatCat14 15th Sep 18, 1:15 AM
    • 1Posts
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    FatCat14
    Best order to pay off debts
    • #1
    • 15th Sep 18, 1:15 AM
    Best order to pay off debts 15th Sep 18 at 1:15 AM
    Hi there,

    I have 4 different debts clear, approximately 1 x £2200, 2 x £1700, and 1 x £1200. All have similar interest rates.

    Until recently I was only in the position to pay minimum amounts, so the debt has hardly decreased at all. However I can now afford to pay £250-£300 a month towards the debts on top of the minimum payment.

    My question is, whatís the best plan of action? Is it best to focus all of this extra money on one ie the largest one until it is cleared? Or a smaller one? Or is it better to spread this extra money across all the debts?

    Iím doing this because I want to improve my credit file (my total utilisation is currently very high) and Iím now in a better position to tackle that a bit. I am trying to plan for the future in terms of getting a mortgage with my partner, but that wonít be for at least three years. If I continue to steadily pay off my debts, will I be in better stead for getting a mortgage in a few years even with a history of high credit utilisation?

    Thanks for any advice
Page 1
    • forgotmyname
    • By forgotmyname 15th Sep 18, 2:00 AM
    • 27,603 Posts
    • 11,174 Thanks
    forgotmyname
    • #2
    • 15th Sep 18, 2:00 AM
    • #2
    • 15th Sep 18, 2:00 AM
    highest interest rate even is its 0.0001% greater.
    Punctuation, Spelling and Grammar will be used sparingly. Due to rising costs of inflation.

    My contribution to MSE. Other contributions will only be used if they cost me nothing.

    Due to me being a tight git.
    • Nebulous2
    • By Nebulous2 15th Sep 18, 5:16 AM
    • 2,018 Posts
    • 1,243 Thanks
    Nebulous2
    • #3
    • 15th Sep 18, 5:16 AM
    • #3
    • 15th Sep 18, 5:16 AM
    You need to give more info. What they are, companies involved, credit limits and interest rates.

    As an example, some credit cards are good at giving 0% offers. If you have one of these, then I'd pay it first. Then as it reduces you can transfer a balance from somewhere else to reduce your interest.
    • binaryuniverse
    • By binaryuniverse 15th Sep 18, 10:39 AM
    • 766 Posts
    • 479 Thanks
    binaryuniverse
    • #4
    • 15th Sep 18, 10:39 AM
    • #4
    • 15th Sep 18, 10:39 AM
    Whilst the highest rate is, mathematically, the one to aim at first, getting rid of the smallest balance can have a psychological effect, and make you feel as if you're getting somewhere with it. It also be one less outgoing per month, which can then be thrown at the other debt.

    And, as mentioned above, if one has the potential of a 0% balance transfer offer, it pays to get that one cleared and shift as much of the remaining debt to that as you can.
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