How do you pay off loans most effectively?

[AShortName]

We were saving for a big job that needs doing in the house £30000.

We've saved up 10, but now the job has become urgent and needs to be done now.

We've taken a £20000 loan (well added to the mortgage, but want to think of it separately).

So now instead of saving the 20, we have to pay it off. It's over 25, but that's just to keep the monthly payments down. I want it gone asap, but also want to save.

How would you all go about paying it off?

Ps we can overpay as much as we like, but need to have money to live off (I just hate borrowing money)

It totally depends how much you have available and what the interest rate is. If you want it gone asap, then chuck every spare penny at it.

What's the interest rate on the loan? And on your savings?

The interest on the loan is definitely higher than our savings.

If we could have waited to save we would have.

If interest on the loan is higher than savings then just throw everything at the loan, if that’s what you want to do.

I don't think there's any magic formula here. Are you able to overpay as much as you want without penalties? In which case it's just a matter of overpaying what you can while having enough for spending.

It would be sensible to save a small amount separately, but not too much since cash in savings is essentially costing you money (whatever the interest rate difference is).