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Help Deciding What to Pay Off?

June 12th, 2008 at 08:14 am

I paid off 1/2 of my consumer debt. I owe at this point a remaining $6,800 which I'm hoping to tackle in the short-term future (by end of summer). I have (as of tomorrow) $4K to apply. Here is what I need to tackle:

$2,300 @ 3.99%

$2,700 @ 0% til Nov 08

$1,700 @ 0% til March 09

Divide it equally among all three?

Total payoff of the $2,300 then apply the balance to $,2700 on line 2?

Pay off those at 0% because interest will be higher than 3.99 when balances come due (though I hope to have them paid off).

I will also have another $1,000 at the end of the month to throw at this.

13 Responses to “Help Deciding What to Pay Off?”

  1. merch Says:

    I would pay off the 2,300 and the 1,700. Then you can really focus on that 2,700 which at the end of the month becomes 1,700.

  2. creditcardfree Says:

    I agree with Merch...why not pay off two and only have one to focus on. I think the interest rates are negligible considering how fast you are paying these off. Good for you!

  3. aliberl Says:

    Since you have $5000 to put toward your debt this month, I would pay off the ones that have the higher interest rates first ($2300 and $2700). you will still get motivation by paying off two debts, and you'll be left with a small(er) 0% interest debt that gives you 9 months to pay off. that is only $189/month. Is that doable?

  4. mom-sense Says:

    Thanks for the input. I tend to second guess myself at every turn and would probably put it in the bank and hoard until I could payoff in full. I struggle with this open-hand concept of letting money flow through.

  5. simpletron Says:

    I would go the other way paying off the 2300 then 2700 then 1700. you'll have only one debt at the end of the month and gives you 9 months to pay it off versus 5. life happens and you don't know what's around the corner. but creditcardfree is right, it's not going to matter if you keep up the pace.

  6. KellyB Says:

    I would also go the route of paying off the $2300, then apply the rest to the $2700. Focus on paying that one off before November and then you have til March to pay the next one off. Good luck and good job! You'll be done in no time!

  7. creditcardfree Says:

    I might add one other things since you say you tend to hoard money. If you pay off the 1st and 3rd...you might give yourself motivation not to hoard money that you would have for debt...that last debt has a short period of time before the interest rate goes higher. I am assuming you have an EF.

  8. disneysteve Says:

    Can you stand one more opinion?

    In the grand scheme of things, it really doesn't matter how you do it because the amount is small, the rates are low and it will all be gone very soon. The order you choose will only make a very minimal difference in the overall amount repaid.

    That said, I would pay off the $2,700 first since it is the one that will reset to a higher rate the soonest. Then, I'd move on to the $1,700 to be sure that one gets repaid before the 0% expires. Then take care of the 3.99% loan last.

  9. Aleta Says:

    I agree with most of the posters above about paying off the $2300. first. You said that you have $4000 and will have another by the end of the month. That $5,000 will pay off the $2300. and the $2700. You will have until March of 09 to pay off the $1700. You didn't mention what you monthly payments are. Once your first two are paid off; you can add those scheduled monthly payments to the 3rd and only debt left. I think only having one will challenge you to find ways of paying it off even faster. You're doing great.

  10. disneysteve Says:

    Actually, I wouldn't pay off either of the 0% loans early, but I would set aside the money in a high-yield MMA so that I was ready to pay it off before the offer expired and the interest came due. I wouldn't give them their money any sooner than I had to.

  11. Aleta Says:

    I agree with you about that point of not paying off the bottom two until it is due but everyone is different and they might be want to spend it on other times. I would put it in a high yielding savings account myself but then I don't feel the temptation to spend. Make some money on it and put it in your emergency funds.

  12. laura green Says:

    I would first look into the 2700, which at the end of the month becomes 1700.
    laura green

    Well, I think that if you're in serious debt, you should get in touch with a company which provides expert debt advice on various solutions to become debt free, and which doesn't take any money for it, like a not for profit organization.

    debt advice


  13. sara lee Says:

    I'd concur with merch's advice to concentrate on the first two debts after which dealing with the last one will be more manageable to deal with.

    sara lee


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