What should I pay off first?

Visitor (not verified)
anonymous user
Registered: 12-31-1969
What should I pay off first?
4
Fri, 08-31-2012 - 6:59pm
I have a $9,400 balance credit card w/ 0% interest rate until July 2013. I then have a $6,200 student loan w/ 4.7% interest rate. I try to apply $600 monthly pymt toward my credit card but now that I think about it, is it more logical to pay off the student loan first? I just liked seeing my credit card bal go down!! Thanks!
iVillage Member
Registered: 04-16-2008
Fri, 09-14-2012 - 5:31am

Carolyn has given some excellent advice.  Just want to add, depends on the type of student loan and your income, the interest on stduent loans are often tax deductible, which would make the effective interest rate less than 4.7%.

Community Leader
Registered: 03-17-2003
Sun, 11-11-2012 - 9:46am

Just checking in to see how you are doing with your accounts and if you decided on a plan of attack?

Let us know how you are!

Carolyn

iVillage Member
Registered: 10-31-2002
Wed, 12-26-2012 - 9:29am
You begin with the highest debt, create a spreadsheet with each acct. and balance. This way you have a visual of the debt going down, any additional income apply to the highest debt to pay down. Also most importantly you should have a min. of 1000 in savings don't touch this money it is for emergency funds. Once the highest debt is paid, you take that money and applied it to the next debt which is the student loan so for example you had the credit card payment at 200.00, you make your regularly monthly student loan payment in addition to the 200.00 from the now paid off cc and applied it to principal, make sure you put principal in the memo line and a sticky note indicating 200.00 is for principal only. This will knock the debt rather quickly. Once all the debt is cleared then that money goes into savings.
iVillage Member
Registered: 01-04-2013
Fri, 01-04-2013 - 7:43pm

gracemae59 wrote:
  most importantly you should have a min. of 1000 in savings don't touch this money it is for emergency funds.
 

How are you supposed to save $1000 if you need all your money to pay your bills and debt?