Which debt do I pay off first?

I have a bond, car and a credit card loan. I am rearranging my finances and am starting to see some surplus money which I would like to use for decrease my total debt. Which debt do I start with and settle or should I spread my surplus across all of them?

Congratulations on starting on the road to wealth and ultimately a comfortable retirement. The way to approach the early repayment of your debt is to start with the most expensive first. So for example if you are paying 12% on one of your debts and 10% on another, you should pay all of your available excess cashflow into the 12% debt and only when that is fully paid off do you turn to the 10% debt. Turning to your three debts, The Bond, The Motor Car debt and the credit card loan. Normally the credit card debt would be the most expensive so pay that off as quickly as possible and make sure that you continue to pay your credit card in full each month. You would then ordinarily direct your savings to the motor car loan and finally pay the money you are now saving towards reducing your bond. Remember that every rand in interest that you save equals a tax free saving of that interest.
Gavin Came
BComm LLB CFP(r), Financial Consultant
Sasfin Financial Advisory Services



Visit Expert Site

Back To Experts

Latest Answers


Which debt do I pay off first?

Google + Mail


Saving for your children's tertiary education

Google + Mail

Seasons are changing and with it the increased chances of snotty noses and chest infections. But some people believe that with a tiny prick you could avoid a trip to the doctor this season. There are however many misconceptions around the flu and its vaccine. As in any medical case, seeking trusted sources and facts behind common assumptions and practices is especially important. Let’s see if you have all your flu-facts straight with these myths and truths.

Once new burial options are introduced, a portion of the daily dead may find new resting grounds outside of burials and cremations. Moneybags journalist, Isabelle Coetzee, has a look at alternatives and their costs.

star For only R93.90, you can get 12 hot wings, four sliders and two regular chips when you visit Chicken Licken for the soul mates classic party special.

Download the Spree app and get a discount on your first in-app purchase

Wake up. Create. Film. Edit. Repeat…and…get paid for it! Dream job, right? Well, it could be. With YouTubers like Lilly Singh aka Superwoman coining something stupid like $10 million (R 117 588 500,00) just last year, nearly everyone is trying their hand at it.

Think insulin resistance, and terms such as glucose and prediabetic come to mind. But what does it mean? Moneybags journalist Danielle Van Wyk explores insulin resistance and the warning signs.

Shoprite/Checkers Student Discount

star Visit OK Foods in the Western Cape for amazing deals. Buy your daily essentials at discounted prices from 20 to 27 March.