Hey MMM'rs... somewhat newbie here and I have an opportunity I'd like to just bounce off the forums to see if I'm thinking clearly. I've recently gone through a divorce and due to the imbalance in salaries I had to claim all the consumer debt my Ex had racked up... It seems that in most cases, people will always say to pay off consumer debt first before focusing on Student Loans, mostly due to the interest rates, and the affect it could have on your credit scores, etc, but I'm thinking my sitch may be different... and advice welcomed...
Summary: 5 Debts to work with
Student Loans: $7,800 at 03% MinPymt = $395
Credit Debt 1: $6,600 at 08% MinPymt = $140
Credit Debt 2: $5,400 at 15% MinPymt = $120
Credit Debt 3: $1,300 at 30% MinPymt = $35
Credit Debt 4: $1,100 at 15% MinPymt = $30
I currently have about $9000 cash that I plan on throwing at this debt at once...
My monthly Nut (money left after necessary expenses) is $1,400.00 and this is what I'll be putting towards debt starting next month.
My question is... even though the student loans are a smaller interest rate, it seems like it'd make more sense to pay off the student loan debt with the lump sum so that I could have almost $400 more available per month to through at the other stuff, as well as have a larger security blanket if something unexpected was to happen in that month. If I used the lump sum to payoff Credit Debt 1 & 3 (for example), I'm only freeing up an extra $150 monthly, as opposed to $400...
Any input on this? I don't care about my credit score right now... not an issue. And debt calculators show that I'd have everything paid off within 12 months, regardless of the debts I payoff with the lump sum so in the long-run it doesn't make much difference... just thought it'd be nice to have the extra $200 buffer... Thoughts?