Invest redundancy or pay off loans?

W

wonder

Guest
Hi.. my husband was made redundant and is in the very lucky position to have gotten another job immediately. We have a few outstanding short term loans with a credit union and also a bank loan. Wondering should we use his redundancy money to pay off these loans or should we invest it for a rainy day... any advice?
 
Credit union loan 1 - 140 a week.... Balance of about 7k - about a year left

Credit union loan 2 - 25 a week - Balance of about 4k - 4 years left at this rate but plan was to increase payments once 1st loan gone

Bank Loan - 221 a month.. 6k left to clear.. 2+ years left to pay...

Would leave us with a lot more disposable income if they were gone but most of the nest egg would then be gone. We can still afford to pay the loans thanks be but are we mad to be paying the interest? I know it's a nice problem to have so apologies if offending anyone.
 
It really depends on the amount of interest (& the rate) you are paying compared to the amount of interest you would potentially earn by depositing the 17k, plus whether or not you feel you would need quick access to the money.

Whatever about your Credit Unions loans, I'd say you would probably be better off paying your bank loan off anyway.
 
im no accountant but if it were me then id pay them off.
The feeling not having any borrowing's would give me great peace of mind and I'd sleep a lot better :)

Loans are costing you ~220.25 per week.

Pay off all the loans and save 220.25 a week.
By the time you would have paid off all the loans (4years ) you will have saved ~€46k. And you also have the benefit of not having any loans if things go bad again for your OH.

Or don't pay off the loans and invest the ~€17k, would it double and then some in four years ?
 
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