All Topics / Help Needed! / Finance question

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  • Profile photo of SyphanxSyphanx
    Member
    @syphanx
    Join Date: 2007
    Post Count: 3
    July 2, 2008 - 9:33 am

    Hey guys,
    I know this isn't exactly a property question, but i thought id throw it in anyway since I cant find anywhere else suitable on the website to post it.
    Here it is plain and simple:
    I estimated I will get approximately $2500 back from tax and at the moment my debt is as follows:

    Loan 1: $2400 owing
    Intrest free loan: $600 owing
    I also have rego coming up soon which will be about $850

    What I was thinking of doing was using the $2500 to pay off rego first, meaning i would be left with $1650. Then use the rest of the money ($1650) to pay off a large bulk of some of Loan 1 meaning it will be down to $750.

    The next part is where i need advice…

    Then should I,
    a) dip into personal savings for the remaining $750 and just pay the loan off or;
    b) just keep making repayments (would be paid off in approximately 3 month)

    Cheers.

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    July 2, 2008 - 9:37 am

    Syphanx

    I assume the loan a small unsecured loan with undoubtedly a high rate of interest.

    With your funds you are probably only getting around 5-6% per annum for such a small amount invested.
     
    Payout the loan as quick as you can and save yourself some interest.

    Obviously usual caveats apply if the interest is tax deductible or some other factor you havent mentioned. 

    Quicker you can rid yoruself of non deductible debt you can start saving for that next IP.

    Richard Taylor | Australia's leading private lender

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