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Author Topic: Which debt should I pay off first?  (Read 2223 times)

justjenn

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Which debt should I pay off first?
« on: July 20, 2015, 06:57:00 PM »
Hey everyone,

I just got married and graduated from college, and Iʻm still trying to get a handle on my finances. DH and I have quite a bit of debt between us, and Iʻm trying to focus on paying them down. Right now Iʻm trying to decide which one to demolish first, and I narrowed it down to two possibilities. I wanted your guysʻ opinion on which one to pay off first.

Option 1: Student loan. app. $4400 @ 6.8% interest. Monthly payment: $83
Option 2: Car loan. app $8500 @ 5% interest. Monthly payment: $300

I canʻt decide between paying off the higher interest loan or clearing up some monthly money in order to get a debt snowball going.

Any advice would be awesome!
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Murse

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Re: Which debt should I pay off first?
« Reply #1 on: July 20, 2015, 07:02:32 PM »
Trick question? Highest interest.
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Cessna152

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Re: Which debt should I pay off first?
« Reply #2 on: July 20, 2015, 07:04:07 PM »
Highest interest always. Plus since that's your smaller amount, it'll be a quick victory to set your sights on the next one.
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MDM

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Re: Which debt should I pay off first?
« Reply #3 on: July 20, 2015, 07:09:44 PM »
You could download the spreadsheet from http://www.vertex42.com/Calculators/debt-reduction-calculator.html and see how much the different options would cost/save you.
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justjenn

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Re: Which debt should I pay off first?
« Reply #4 on: July 20, 2015, 07:20:16 PM »
thanks everyone! Iʻm determined to pay off that SL as fast as possible. Itʻs so close to being done, itʻs been driving me crazy.
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