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What would you pay off first?

T

TheSiege

Diamond Member
My student loans are
$1260 @ 3.15% w/ 33 months left $50 monthly
$4094 @ 5.35% w/ 88 months left $60 monthly
$4112 @ 5.75% w/ 88 months left $60 monthly
Total = $170
I actually pay $225 a month

My "20" portion of my 80/20 house loan is around
$8400 @ 6.35% w/ 87 months left $150 monthly
I actually pay $175 a month

With interest deduction and what not, I am not sure what to pay off first. I can pay all my students loans or all my mortgage, but not both and be safe...
 
If there are no penalties, I'd pay the $1250 off right away (as it is the smallest and easiest "hit" to take) in or two payments. Then, I'd start working on the highest interest one in a similar fashion.
 
If your mortgage interest is lower, I would try to consolidate that into the mortgage so you have a single debt, then pay whatever you are paying now extra on the mortgage to make up for it.

I guess it mostly comes up to the same thing though but it's just a better feeling when you only have 1 debt to manage.
 
Red Squirrel said:
If your mortgage interest is lower, I would try to consolidate that into the mortgage so you have a single debt, then pay whatever you are paying now extra on the mortgage to make up for it.

I guess it mostly comes up to the same thing though but it's just a better feeling when you only have 1 debt to manage.
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+1
 
The only reason I hesitate on the mortgage is because with mortgage interest deduction, that 6.35% is more like 4.35%
 
God, I'm jealous of those student loans...

If you do itemize and utilize your mortgage interest, pay the 5% student loans, then the mortgage, then the smallest student loan. Although honestly, it'd be easier and negligible to just finish the last student loan before the mortgage.

If not, pay the mortgage and then student loans based on interest rate.
 
I don't have a mortgage and don't know what specials they have but I'm just going through all my school loans from highest interest to lowest.
 
$4112 @ 5.75% w/ 88 months left $60 monthly

then

$4094 @ 5.35% w/ 88 months left $60 monthly

no brainer to pay those off first.
 
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Don't roll that shit into your mortgage but I'm quite conservative when it comes to the roof over my head.

Although a lower rate, I'd hit the $1260 1st just because it's low but make sure you don't spend the extra $$. Apply it to the others then to the mortgage.

Debt free is the way to be. I preach that to my customers.
 
highland145 said:
Don't roll that shit into your mortgage but I'm quite conservative when it comes to the roof over my head.

Although a lower rate, I'd hit the $1260 1st just because it's low but make sure you don't spend the extra $$. Apply it to the others then to the mortgage.

Debt free is the way to be. I preach that to my customers.
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Why though? It's accruing at a much lower rate. Wouldn't it be better just to put $1260 into his 5.75% loan?
 
As Dave Ramsey would say, pay off from smallest to largest. Yes the higher interest makes the most sense. But are brains need to see something happening, needs fulfillment. Then snowball the payments into the others, it will work.
 
TheSiege said:
My student loans are
$1260 @ 3.15% w/ 33 months left $50 monthly
$4094 @ 5.35% w/ 88 months left $60 monthly
$4112 @ 5.75% w/ 88 months left $60 monthly
Total = $170
I actually pay $225 a month

My "20" portion of my 80/20 house loan is around
$8400 @ 6.35% w/ 87 months left $150 monthly
I actually pay $175 a month

With interest deduction and what not, I am not sure what to pay off first. I can pay all my students loans or all my mortgage, but not both and be safe...
Click to expand...

It's a hard call, technically you always work off highest interest first. However; if the shit hits the fan and a bankruptcy is needed schools loans don't go away.

What can you afford to pay each month? If this was my only debt; I'd raise those payments if I could.
 
AznAnarchy99 said:
Why though? It's accruing at a much lower rate. Wouldn't it be better just to put $1260 into his 5.75% loan?
Click to expand...

iwajabitw said:
As Dave Ramsey would say, pay off from smallest to largest. Yes the higher interest makes the most sense. But are brains need to see something happening, needs fulfillment. Then snowball the payments into the others, it will work.
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This except for...:biggrin:

Overall...math works but people need to see progress. He doesn't have some stupid high interest loans so the encouragement of a payoff might be better, imo. YMMV depending on his long term income potential.
 
iwajabitw said:
As Dave Ramsey would say, pay off from smallest to largest. Yes the higher interest makes the most sense. But are brains need to see something happening, needs fulfillment. Then snowball the payments into the others, it will work.
Click to expand...

That's a real crap reason to be paying more IMO.

However, I'm glad my higher interest loans were lower and the bulk of my loans are at 3.15%
 
iwajabitw said:
As Dave Ramsey would say, pay off from smallest to largest. Yes the higher interest makes the most sense. But are brains need to see something happening, needs fulfillment. Then snowball the payments into the others, it will work.
Click to expand...
Alternatively, do it the smart way and save hundreds/thousands of dollars.

These are relatively small loans. I'm sure he can wrap his brain around it.
 
Let me clear some things up. I have the money to pay it off completely. About 9k to spend and feel comfortable. So I am thinking of paying off ALL of my student loans or ALL of my "20" mortgage. I should note, my "80" portion is just under $650 a month. So my mortgage is pretty reasonable
 
I'd just pay off the student loans then, highest ones first, and let you're equity work for you tax wise personally.
 
The drug dealer...

Oh, your list. No idea. There's probably an objective analysis you can, which factors in all the interest and deductions... Talk to your bank?
 
AznAnarchy99 said:
That's a real crap reason to be paying more IMO.

However, I'm glad my higher interest loans were lower and the bulk of my loans are at 3.15%
Click to expand...


SURE, but would you rather get laid now, or pay for the higher interest first, may be years. LOL. see what I mean...ya brain don't wanna wait, though it can make sense of it.
 
I'm guessing you are not paying PMI due to the 20/ part of your mortgage?

Personally, I'd go for the student loans, but mostly to get a form of payment out of your life.
 
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