What to deal with first??

[twinnywinny14]

I have just received £556 in back pay (slight increase in hrs plus pay rise) for April and May, and from next payday I’ll be getting £276 extra than I’ve been used to. Current debt situation is this: owe £1200 overdraft, £1800 left on car loan, £1530 second loan, mortgage £138000 with 15yrs left, plus we have help to buy situation so will need money for that at some point. In 10 months the second loan will be paid off giving us £153 a month extra, so would really like to use this extra £ coming in each week to do something with rather than it getting swallowed up (we are relatively low earners so it would happen easily!) any ideas what we should do??

What has the highest rate of interest?

If it were me I would sort my overdraft then put the extra £276 into a savings account until you have enough to pay off the car loan. This should be roughly when the second loan will be repaid so, in 10 months you will be debt free apart from the morgage.

Then I would put the £276 plus the amount you were paying for the car loan and second loan into the savings account and build up some savings. You could then over pay on the mortgage.

Up till now you've been paying the loans mortgage on due dates.
Use the extra cash to reduce the OD. Make sure you reduce it at the bank too so not to eat into it again..in 3 months your OD should be nearly done.
Save the extra pay each month to get an emergency fund.

Get rid of that overdraft! Then save the rest.

Pay it onto whichever has the highest interest rate.

The £500 odd I would use to pay off most of the overdraft. From the additional money that you have coming in, I would put £50 in savings as a standing order and then start to repay the over draft, second loan, car loan. Once they're paid off, I would put the whole lot into savings. I wouldn't pay more off the mortgage if I didn't have at least six months of bills saved as an emergency fund. Obviously how much you already save and interest rates will also play a part in this.