pay off the current loan.it will stop you paying any more interest. take a look at a new car if you ask around you will find you are entitled to a great deal with a partners allowance with one of the big car companies,no advertising but it begins with a V. this gets you an extra 8% off the price of the car. put down a couple of thousand deposit to keep your repayments down and pay off the rest at 0%.(over a maximum of 5 years) keep your £5,000 in the isa to try to earn what little interest you can.

Not being aware of your financial circumstances or your creditworthiness, I could only offer you my opinion on the measures that I would personally take given your position.

I would firstly pay of the existing loan entirely, then set my sights lower by purchasing a much cheaper but nevertheless perfectly suitable car for around £5k.

That should still leave you with around the £5k funds that you need to start saving towards your deposit for a property. This may not be what you would like to hear, but it saves you paying any interest out on loans, which enables you to save more money much faster towards a deposit. At the same time the car will be totally your own property and very importantly without the burden of you owing any money on it in these uncertain days.

No takers?

Hi.

I'm currently serving in Afghanistan. I sold my car before I left. The personal loan for that car will have £5000 left on the balance when I return. I have £5000 from my car sale in an ISA. I will have about £15000 when I return "including" this £5k in my ISA. I want to purchase another car priced at roughly £11-12k max and Id like to save £5k to start building my deposit for a mortgage. Yes, I could use ALL the money for a deposit but at present, my credit and income are, in my opinion, not yet in a suitable position to maintain something like that. In 2yrs time...it will be. So, back to the plan; do I:

A) Pay off my current loan in full and seek a new one for the total cost of the car ?

B) Get a top up of about £6000 on my current loan (who knows, the APR might even drop) and use a further £6000 of my savings?

C) Any other suggestions?

I appreciate you taking a look at this.

Kind regards.