I have two loans.
This first I took out for my husband to use for his business as my credit was considerably better than his at the time. It has 34 months remaining, an interest rate of 2.8% and costs £260 a month. My husband pays this each month.
The second was for my car. Has 57 months left, an interest rate of 6.4% and costs £235 a month. I pay this.
My husband has informed me that his business is now in a position to repay his loan in full so will be sending me the final balance so I can clear the loan.
I am just toying with the idea of not paying the loan off, putting the money aside and throwing as much savings at it as possible so that I can use it to clear the larger, more expensive loan I took out for my car so I can then just pay the smaller, lower interest one each month from there which although slightly more expensive monthly obviously ends much sooner so will save more money in the long run. The difference between the loans is about £3300 which I could save by about October/November to clear the larger one.
Part of me feels this is a good idea but also part of me just wants to clear the loan straight away so it's gone for good. It's a bit of a complicated situation involving my husband's business partner and me taking out the loan for them both when very unwell during pregnancy; DH was panicking a bit about a new baby and had a grand plan to make the business earn more faster which I felt a bit railroaded into in taking the loan to cover not only my husband's half but his business partner's too. What they actually used the money for ended up costing them a lot of money and we had a difficult few years as a result. The business recovered and is obviously now doing a lot better so all is well now but there is an emotional trigger to this loan that really I would just like it gone so I don't see it every time I open my banking app as I do feel angry at both myself and my husband for ever having taken it out in the first place.
But financially I know it would be better to get rid of the larger more expensive loan first.
Any advice would be appreciated.