How would you rate which creditor to pay off first?
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I have set a goal to try to figure out the best way to pay off all our debt before 2011.
But I am not sure which ones I should pay off faster than others and in what order? Basic list of debt below:
Credit Card Balance $7,764 at 13.24%...Payment $100.
Credit Card Balance $3,325 at 9.90%...Payment $102.
Personal Loan $8,321 at a killer 24.85%...Payment $293.
Auto Loan $11,051 at 14.99%...Payment $261.
Any suggestions would be great and what would these payments need to be increased to to pay them off in 4 years?
How would you rate which creditor to pay off first?Okay, your total current payments are about $655. First you need to decide how much you want to apply towards debt reduction.
Be a little conservative here. Make sure you allow yourself money each month for savings (until you have about 4 months income saved), entertainment and the occasional emergency.
You must make your car payment of $261 and I am guessing the personal loan is already the minimum required payment of $293.
Determine the minimum payment for the two credit cards.So of your $655 payments at least $554 of that is required. So I would start paying the minimum on the two credit cards and put the rest toward the personal loan.
When the personal loan is paid off go after the 13.24% credit card and then the other card. The car loan is a very high rate but you do have something of value behind it. You can sell your car and cover most of the balance due. I'm not saying sell just that the possibility exists.
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