advice on clearing personal loan or save

hi all, hoping to just get advice and other peoples opinion please. I will start from beginning. a few years ago fell into bad debth with two creditcards and had one payed by reduced lumpsum payment and another taken over by a nother party, any how now I'm black listed and checked my financial score and I wont be cleard till feburary 2017,

any how now I am financialy better with no CC just a personal loan with balance of 8500 monthly payments 328 and all up to date, I am in a position now to double comfortably my monthly payments and pay a lumpsum of 3000, (variable loan by the way) this is one option.

I would like to save for a new van in about two years so I could continue with my loan payments and just save 300 a month to add to my 3000.

also to add took loan out in 2011 for 7 years with 11 percent variable rate

I ask this because my credit rating wont clear until feburary 2017 and not sure if I would get a loan still with a clear sheet ( I applied this year and was turned down)

so hopefully you understand my questions should I aim to pay off loan and then apply for van loan or continue as I am and save.

Your Loan rate of 11% is influencing my way of thinking as it is a very high rate. I would be inclined to pay the €3,000 lump sum off immediately which would leave a Balance outstanding of €5,500. You state that you could comfortably pay €650 per month off your loan balance which would have the loan cleared in 12 months.
I am not sure what you mean by a "new van" but in 12 months time if you started putting away the €650 into a Credit Union for 12 months you would would have €7,800 saved and enough creditworthiness built up to get a loan.
I am assuming all of this based on your post and that your income capacity continues to be as good as it appears to be now. It is a question of discipline and well done so far.
There will be other posters on with a different view to mine but their advice may suit you better.

Dermot said:

Your Loan rate of 11% is influencing my way of thinking as it is a very high rate. I would be inclined to pay the €3,000 lump sum off immediately which would leave a Balance outstanding of €5,500. You state that you could comfortably pay €650 per month off your loan balance which would have the loan cleared in 12 months.
I am not sure what you mean by a "new van" but in 12 months time you started putting away the €650 into a Credit Union for 12 months you would would have €7,800 saved and enough creditworthiness built up to get a loan.
I am assuming all of this based on your post and that your income capacity continues to be as good as it appears to be now. It is a question of discipline and well done so far.
There will be other posters on with a different view to mine but their advice may suit you better.

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thank you Dermot yes my savings goal would be 10000 as I would be happy enough with that and yes I was blessed with a permanent job with a good rate of pay so my financial worries are over touch wood but I promise you that I will never touch a credit card again

11%! Yikes!

In my opinion, your only financial priority should be paying off that loan ASAP. Like your life depends on it.

If that means living like a tibetan monk for a year, well so be it. That loan must be killing you financially.

To be brutally honest, I think you should put all thoughts of buying anything at all out of your mind. You simply can't afford it. The only possible justification for buying anything you can't eat while you have that loan hanging over you is if you need it to generate income to get out of debt more quickly.

Dermot is absolutely right when he says you have done well so far - now is not the time to go soft on yourself.

My advice is to get out of personal, unsecured debt permanently and take back your life for good. You should be working for yourself and your family - not for some financial institution.

Sorry if that sounds very harsh and I hope you will take it in the spirit in which it is intended.

Best of luck.

Sarenco said:

11%! Yikes!

In my opinion, your only financial priority should be paying off that loan ASAP. Like your life depends on it.

If that means living like a tibetan monk for a year, well so be it. That loan must be killing you financially.

To be brutally honest, I think you should put all thoughts of buying anything at all out of your mind. You simply can't afford it. The only possible justification for buying anything you can't eat while you have that loan hanging over you is if you need it to generate income to get out of debt more quickly.

Dermot is absolutely right when he says you have done well so far - now is not the time to go soft on yourself.

My advice is to get out of personal, unsecured debt permanently and take back your life for good. You should be working for yourself and your family - not for some financial institution.

Sorry if that sounds very harsh and I hope you will take it in the spirit in which it is intended.

Best of luck.

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not harsh at all thank you very much sarenco and yes I can well afford to pay it off and seriously considering it first

Sarenco said:

11%! Yikes!

In my opinion, your only financial priority should be paying off that loan ASAP. Like your life depends on it.

If that means living like a tibetan monk for a year, well so be it. That loan must be killing you financially.

To be brutally honest, I think you should put all thoughts of buying anything at all out of your mind. You simply can't afford it. The only possible justification for buying anything you can't eat while you have that loan hanging over you is if you need it to generate income to get out of debt more quickly.

Dermot is absolutely right when he says you have done well so far - now is not the time to go soft on yourself.

My advice is to get out of personal, unsecured debt permanently and take back your life for good. You should be working for yourself and your family - not for some financial institution.

Sorry if that sounds very harsh and I hope you will take it in the spirit in which it is intended.

Best of luck.

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Let's not get into hyperbole here.This year the loan will cost about €750 in interest or two quid a day.

vandriver said:

Let's not get into hyperbole here.This year the loan will cost about €750 in interest or two quid a day.

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thanks vandriver yes i calculated that my remaininmg interest over the final term would be around 1600

€1,600 in interest payments on an €8,500 loan is a fair chunk of change - particularly where you are making the payments out of after-tax income.

Vandriver is undoubtedly right that I was being somewhat hyperbolic but I am strongly of the view that nobody should carry personal, unsecured debt for any longer than is absolutely necessary.

Particularly debt that carries an interest rate of 11% in a zero inflation world.