Pay off debt, or not?

G

glasto

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I have a debt of approx 12k with Ulster bank that I am paying off at 460 pm ( it was originally 25k, no missed payments, and its at 5.9%, very low). I have inherited some money and am now in the position to pay it off. The cash I have inherited is in a UK bank account ( I inherited off my late father who lived In NI where I am from, so I put it in an old UK account), UB have told me that to clear the debt will be approx 11k.

Now my heart is telling me just to clear the debt and be in the blissful position of being debt free ( no negative equity either - hurray!). But my head is looking at the german irish bond spread nightmare, and thinking things here might go completely tits up in some way. My debt was originally a UK debt and i was badly burned coverting it to a Euro debt at the wrong time. ( 1.42 IIRC) SO, I'm tempted to not clear the debt and just keep on making the monthly repayments, and see what happens in the next few months. but I'd love to get rid of the debt and know I was debt free. WWYD?
 
I'd get rid of the debt. You have no idea what the next month could bring for you and being debt free would make any potential loss of earnings, job loss etc etc a hell of a lot easier
 
I think I'd pay it off too. If you do is that all the inheritance or will you have something left? It's nice not to have any debts and you'll be 450pm better off which you can save instead?
 
I'll have something left, well, I will if I ever manage to sell his apartment.
 
How disciplined a saver would you be with the extra €450 ?If the answer is that the money would probably be spent every month,then I would carry on paying the loan off and know that your lump sum is still intact.
 
Well the thing is, I'm off on long term sick at the minute, and the €460 plus not having to pay child care is meaning that the gap between my salary and the sick pay is substantially lower. If I was on full pay again, I reckon I'd be able to save a fair lump of the €460, but not all. Its really tempting to be debt free ( all other bills have been paid off), but if there was a devaluation or something I'd be sick, as I'd feel like I had been burned twice on the exchange rate.
 
"If I was on full pay again, I reckon I'd be able to save a fair lump of the €460, but not all."

So we can presume you are finding it though to pay this 460 per month loan repayment? Then (IF it was me) I'd pay loan off. Then when you return back to work set up a S.O of say 400 a month into a savings account and that way you'll have to save it.

But it's your money & if it's your only loan you're not doing too bad :)
 
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