which to pay extra towards? (debts, rate, credit, increase)

[PG2005]

Maybe this is obvious to others, but I can't reach a conclusion. If I have extra money left over each month, which should I be paying extra towards?

My debt:

1) mortgage $167,738 @ 4.875%
2) car loan $7,670 @ 4.79%
3) private student loan $75,958 @ 4% (variable)
4) federal student loan $1,874 @ 2.220% (variable)

I'm a little nervous with #3 being a variable rate. I am comfortably paying my minmums, plus have an extra $500 or so each month. I already contribute enough to my 401k to have my company fully match.

Thanks for your advice!

[CTGirlNoMore]

IMO, I would pay off #4 first, then #2.

As far as #3, is there at particular point that the rate can chage? Or is it locked into that for a certain number of months/years?

[CTGirlNoMore]

I meant to add, pay off #4 first, then the amount you have leftover afterwards from not having to pay that anymore, apply to #2. Then when #2 is paid off, take your freed up money once again and apply to #3.

[PG2005]

Particular reason for paying off the smallest first? I'm not one that needs motivation to pay off debt (ie not a Dave Ramsey follower).

[CaptainNJ]

i would just make the normal monthly payments unless there is reason to be worried about a significant increase in those variable rates.

[user_id]

That's some massive debt. Regardless, I'd probably pay the car loan off first since its the only one that can't be deducted for tax purposes, then I'd perhaps pay off the federal student loan just to get rid of it.

If there is any sign of interest rates spiking, I'd divert everything to #3 though.

[Boompa]

Originally Posted by PG2005

Maybe this is obvious to others, but I can't reach a conclusion. If I have extra money left over each month, which should I be paying extra towards?

My debt:

1) mortgage $167,738 @ 4.875%
2) car loan $7,670 @ 4.79%
3) private student loan $75,958 @ 4% (variable)
4) federal student loan $1,874 @ 2.220% (variable)

I'm a little nervous with #3 being a variable rate. I am comfortably paying my minmums, plus have an extra $500 or so each month. I already contribute enough to my 401k to have my company fully match.

Thanks for your advice!

Money paid toward your mortgage is all principle. That would be an obvious however if you pay off the smallest first you increase your take home and thus increase the amount you could pay toward the next smallest. That was how I paid off my credit cards

[CTGirlNoMore]

I just suggest the smallest first to knock one debt completely off your list. That's how I would do it.

But as another poster said, if there is a reason the interest rate would spike, I would take care of #3 first.

[peppermint]

I would be extremely uncomfortable with the variable rate loans. I mean extremely. If it were me, because I hate variable rate loans so much, I'd put everything I could (bonuses, Christmas money, pennies from the street) on #3 & 4. When I got raises, I'd put the additional money toward those debts. That's just me though.

[PG2005]

Originally Posted by user_id

That's some massive debt.

I wasn't interested in your take on my level of debt, just which to pay extra money towards. Thanks for your concern though.