Which loan should we pay off first?

H

hamrog

Guest
My partner and I took out a mortgage over 30 years about 18 months ago.

We have a credit union loan of 20,000 not due to be paid off until mid 2008. I have a personal loan of 7000 with NIB to be paid off in mid 2007 and my partner has a loan with BOI for 15000 to be paid off in 4 years.

At the start of 2005, we promised each other we'd look at our finances and make an effort to reduce our debts. We were thinking of increasing our mortgage payments as we saw this as an investment in our property and if we ever thought of selling we'd be better off. Any advice on whether this is a good idea or should we concentrate on increasing our repayments on our other loans
 
loans

Personally, being in a similiar situation ( we got an €18000 CU loan for our deposit) we chose to pay this off first by throwing all we could at it. We will have paid it off over a 2 and a half year period. It will be gone in about 5 months and then we can look at increasing our mortgage payments, but the interset was obviously higher on this loan than the motgage.

I would say the way to go is to pay off the loans with the higher interest rates first.
 
Re: loans

As Havana says, you should pay off the highest interest loans first and/or consider refinancing all loans at lowest rates possible.
 
Re: loans

out of curiosity, did you tell the credit unions that the loans were for house deposits.
I may consider doing the same but I though I saw a cu brochure that openly said that they gave loans for deposits.

S
 
Re: loans

Hi Savy,

In answer to your question.

No I didn't tell the Credit Union the loan was for a deposit on a house, I told them it was for home improvements. Although I hear that it's very common for people to borrow the deposit on a house.

Our own situation was we were paying high rents in Dublin, hadn't the deposit saved, and decided to chance the arm and ask the credit union for a loan saying it was for home improvements. I thought it too risky to blatantly ask them for money for the deposit.
 
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