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    • middleclassbutpoor
    • By middleclassbutpoor 8th Jul 18, 12:48 PM
    • 400Posts
    • 357Thanks
    middleclassbutpoor
    Which is the best way?
    • #1
    • 8th Jul 18, 12:48 PM
    Which is the best way? 8th Jul 18 at 12:48 PM
    Hi

    We are currently on a journey of repaying our unsecured debt. Below is kind of as much info as i can give you off the top of my head so apologies if too much or you get bored before the end.

    In very simple terms, I am forecasting that by the end of November this year, we will have repaid all of our credit cards fully.

    Assuming affordability is not an issue we have a decision to make in December re our next steps on repaying debt. The choices we will have are;

    - Repay around 14k of unsecured loans or
    - start on the 25k (un)secured loan that we have with Northern Rock.

    I believe we could pay off the 25k in 10-12 months.

    Whilst it is secured currently, I have considered also looking at a remortgage with an 85% LTV based on sold prices and what is owed on the mortgage element. It may be 80% if we we were to get a favourable valuation but not sure if that would make a massive difference if not below 75%.

    Is it worth remortgaging before paying the 25k off? Given it's most likely only going to be 10 months - poss 12 at a max?

    I know the interest rate on the secured loan rises when it becomes unsecured but I could potentially put it on the credit cards as a money advance to combat this but not sure if it would just be cleaner to get rid and then sort the mortgage later?
    Last edited by middleclassbutpoor; 08-07-2018 at 3:39 PM.
Page 1
    • getmore4less
    • By getmore4less 9th Jul 18, 6:50 AM
    • 33,479 Posts
    • 20,232 Thanks
    getmore4less
    • #2
    • 9th Jul 18, 6:50 AM
    • #2
    • 9th Jul 18, 6:50 AM
    Rather than too much there is not enough detail.

    (This would also be better on Debtfreewanabe)

    you will need
    All the rates on the debt including mortgage and the NR loan if it goes unsecured.

    current payments(with mins)

    income

    remortgaging could form part of a plan but the details are important.

    the key elements to debt reduction are.
    More cash(spend less).
    Lower rates
    Which reduces the time it takes.

    Snowballing and identifying where you can reduce the rates helps optimise.
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