What you should be aiming to do is move as much of your debt to as low a interest rate as possible, whilst paying as much as much as you feel comfortable with each month.
Mortgage and Loans Secured On Your House
Of all of your debts these are the most important, as if you default on monthly payments you run the risk of losing your home. Unless you only have a few years left on your mortgage (less than 5), do not be tempted to either increase the size of it to pay off other debts or extend the length of it. In the first instance you will end up paying off your debts over many years, and in the second you will be in debt for longer. Both mean you will pay end up paying more in interest.
Remortgaging is one way to reduce the amount you pay on your mortgage, and if you are on a standard variable rate it will certainly be worth investigating. This may involve some upfront outlay in arrangement fees from the new lender and early repayment penalties from your existing lender, so these will have to be weighed up against the savings you will make. My advice is to speak to an independent mortgage advisor, who will be able to tell you whether this is the right course of action for you and, if it is, find the mortgage that is best suited to you.
There is little you will be able to do with other debts secured on your home. If you can afford it you may be able to reduce the term of the loan (and therefore increase the monthly payment), but secured loans are usually the cheapest way to borrow money. If you have extra money available to put towards your debts you would be better off paying off credit cards and overdrafts first.
Credit and Store Cards
After loan sharks, store cards are one of the most expensive ways to borrow money, with monthly interest rates of 2% not uncommon. If you have available balance on your credit card you should immediately transfer your store card balances over, and then cancel your store cards.
Many companies offer 0% introductory rates on credit cards, so if possible you should transfer as much of your debt as possible to one of these. However, make sure you know what the minimum payments is, how long the introductory rate lasts for and if there are any penalties for transfering debt to another card once the introductory rate has finished.
Unsecured Loans
Depending on when you took out the loan and the type of loan you have, it may be possible to move it to a different provider at a lower interest rate. This may be to a 0% credit card or another loan.
You should, however, be careful not to extend the length of the loan. As with mortgages, the longer the loan, the more interest you will pay, so even with a lower interest rate you may end up paying more for it. If you transfer it to a credit card, be sure to pay at least as much each month as you were previously; this way you will finish repaying it quicker. Also check with your current lender for any penaltys for paying off the loan early. If there are any this may negate the benefits of moving it for a better deal.
Hire Purchase & Finance Agreements
As with unsecured loans, you can pay off a hire purchase or finance agreement early, usually subject to a penalty, without being liable for future interest. The way to work out whether it is worth doing this and transfering the debt to another provider is to ask the finance company for an early settlement figure. If you can obtain a loan for this amount at a lower interest rate, and not extend the length of the debt, then you should do so. You can then choose whether to carry on paying the same amount each month to clear the debt earlier, or put the savings towards paying off any more expensive debts.
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