Which Percentage of Money To Pay Various Loans (funds, debts, rate)
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Hi all. For the experienced financial professionals among us.....I have $2500 available every month to split into paying these outstanding loan balances. How should I split the payments percentage-wise to achieve the least interest burden? Thanks in advance for your advice, suggestions, participation, etc.
Personal Loan......$1900 [ 11.23% interest]
Credit Cards........$1800 [21%]
Care Credit.........$2450 [18%]
Auto Loan...........$8100 [10.74%]
Pay off the credit card first with available funds. You’d achieve the least interest burden by paying off the highest interest first without regard for the total amount of balance.
Credit, care, personal, then auto.
None are tax deductible debts so that’s not a consideration either.
Each month, make minimum payments on each loan except for the one with the highest interest rate. Put all of the rest of the money into the highest interest rate loan. Do that until the first one (Credit cards) is paid off.
Repeat. Each month, make minimum payments on each loan except for the one with the highest interest rate. Put all of the rest of the money into the highest remaining interest rate loan. Do this until the second one (Care credit) is paid off.
Repeat until debt is gone. This results in the least amount of interest paid overall. Good luck!
IMO - Best is to pay OFF the high interest loan, NOT make a minimum payment on each!! Pay as much as you can between those that are left - starting w/the highest interest rate one (care - whatever that is).
There’s two snowball methods. Smallest balance first rolled to the next or largest interest first rolled to the next. The smallest balance often is more successful even though it’s not the best mathematically. Why? Because people see results faster and it’s positive reinforcement for the change they have made. Personal finance is personal
Hi all. For the experienced financial professionals among us.....I have $2500 available every month to split into paying these outstanding loan balances. How should I split the payments percentage-wise to achieve the least interest burden? Thanks in advance for your advice, suggestions, participation, etc.
Personal Loan......$1900 [ 11.23% interest]
Credit Cards........$1800 [21%]
Care Credit.........$2450 [18%]
Auto Loan...........$8100 [10.74%]
Before you start on debt be sure all other bills are current. Your house, utilities. Cut the cable bill, cut extra phone charges. Get current with minimum payments on all loans & don't buy anything on credit.
Then start with Credit Cards, smallest to largest. Kill the small ones first. Getting rid of that 21% interest will help the most. With $2500 get it done in a month or 2. Start October with no credit card debt. Maybe set up calendar schedule so you pay each one as it comes due. Pay the current balance before the statement date.
Second do Personal Loan. With $1800 not going to credit cards + $2500 pay it off in October.
Third do Care Credit next. With $1800 in credit cards gone & $1900 in personal loan gone use $2500 to pay that off in November.
Fourth do Auto Loan. Keep payments current while you payoff Credit Cards, Personal Loan, Care Credit. One option may be to save the $2500 and keep with the program paying down the loan. In 4 months maybe have $8,000 to use. The loan may be in the $7000 range by then to payoff by March.
So by April 1 don't be a fool be debt free (except for the house).
Once this is cleaned up maybe use Credit Karma to find a lower interest credit card or get a no fee rewards card. For spending $2500 maybe get $25 back.
Wait a sec. Before engaging these techniques should I attempt re-financing first? I was out discussing all these tips with a buddy and he told me if it's possible to drop the interest rates with a refinance. wow, all this is so new info to learn about.
Wait a sec. Before engaging these techniques should I attempt re-financing first? I was out discussing all these tips with a buddy and he told me if it's possible to drop the interest rates with a refinance. wow, all this is so new info to learn about.
Following GWoodle’s plan, you are going to have everything paid off (except the car) by the end of the year or close to it. I wouldn’t mess with “refinancing” anything. Just get everything paid off, then use the $2500 for several months to establish a good emergency account so you don’t find yourself in the same boat again.
Wait a sec. Before engaging these techniques should I attempt re-financing first? I was out discussing all these tips with a buddy and he told me if it's possible to drop the interest rates with a refinance. wow, all this is so new info to learn about.
You’re kind of giving us a black box scenario, but seeing as how you say you now have $2,500 of free cash flow, I wouldn’t think it’s worth it to spend all that time and effort to “refinance” (and I don’t see how you’d do that on many of those items anyways). The debt would be gone in 5 to 7 months anyways.
You’re kind of giving us a black box scenario, but seeing as how you say you now have $2,500 of free cash flow, I wouldn’t think it’s worth it to spend all that time and effort to “refinance” (and I don’t see how you’d do that on many of those items anyways). The debt would be gone in 5 to 7 months anyways.
Ok, so refinancing is a bad idea?. Is there anything else to it besides paperwork or online forms?
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