Paying off high interest debt first is vital

The majority of people in the UK are likely to have some form of mortgage, possibly a personal loan, credit card and perhaps an overdraft. While unlikely at the moment, many of us will at some point possibly come into money and have the chance to pay off a large part of outstanding debt. In this situation it is vital that you pay off the debt which attracts the highest interest as opposed to perhaps overpaying on your mortgage when you are up to date and the rate is relatively low compared to credit cards, personal loans and overdrafts.

While there is no point saying that everybody in the UK should be debt free, because debt is actually required to allow us to grow and acquire a home, etc, if you leave debts with highest interest charges they will continue to build up and you will end up paying-off more and more interest and less and less capital. The more capital that you can pay off in the short term the less interest this debt will attract and the quicker you will pay off the overall balance.

It can be difficult to get your head around how and when to pay off a debt and this is where a financial adviser may well come in very useful.