Paying off loans

M

moneybag

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I hope to be in a position, quite soon, to use a lump-sum of around €40,000 to help pay off a number of loans, whose balances total €59,600. They are : (i) a mortgage, at an interest rate of 3.6%, on a rental property (the interest on which is tax deductible), with a balance of €31,300 and 15 years still to run (i) an equity-release home loan, at an interest rate of 3.6%, with a balance of €10,600 and 7 years still to run, and (iii) a personal loan from the local credit union, at an interest rate of 8.6%, with a balance of €17,900 and 4.5 years still to run.

Has anyone any advice on the priority order I should pay off the loans?
 
Pay off the credit union loan first because the interest rate is highest. If the credit union required money left on deposit to secure the loan, you can then put that towards paying off the other loans.

Next pay off your personal mortgage, because (you say) it's at the same rate as your investment mortgage.

Even if the investment mortgage actually has a higher rate than your home mortgage, pay the investment off last. This is so you can offset the remaining interest against your rental income (provided of course you have sufficient rental income!).
 
The credit union loan should be payed off first as it's the highest interest. Then your exquity release loan. You'll have 11500 left to pay towards your rental property loan.

Don't forget you now have the money you were paying everyweek off your credit union loan and your exquity release loan spare.
You should start paying some or all of this money everyweek off your rental property loan.Also so if you can try and negociate a better loan interest rate on your rental property loan.
 
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