8 Payments left

[--weezl--]

I'm generally a Dave Ramsey follower, and I agree with his idea of paying off the lowest balance off first for several reasons.

That said, mathematically Weezl is 100% correct on this. Every single time, you will pay less in interest if you pay off the highest interest rate first. There is no arguing against this, as it's just simple math. Dig around enough on DR's info and he clearly discusses this. It's not up for debate, just facts and math. If you want to look at the numbers, try this spreadsheet. It will let you put in all your debts and look at various scenarios to see the differences when you pay off things in different sequences.

The reason I subscribe to paying off low balances first is that it frees up income sooner and it lets you psychologically feel real progress as you eliminate debts. Each one you eliminate lets you push that income to the next debt. If you're paying off smaller items, then you quickly have 'extra' income that is available if you suddenly have a short month. If you're talking about a car loan with a high interest rate and several years to pay it off, you may have knocked out half of it but you're still stuck paying the full amount in a month that you have an unexpected bill and the amount you've paid off doesn't come back to help you out unless you've completely knocked out the bill. Hope that makes sense, I'm not sure I worded it very clearly.

yes, this is exactly what i was trying to say, but didn't really feel like putting enough thought into wording it that way...

adsm, i think what you're trying to say i agree with also... if you have 3 credit cards with interest rates of near identical values (say .1 % difference or such) then i would pay off lowest balance first, that makes sense

 

[fastpakr]

You might be surprised how little difference it makes even with larger variations in interest rate. For my wife and I, throwing everything into the mix including house and student loans, there's only a month or so difference depending on how we order the payoff over the years it will take to get it all knocked out.

 

[hoosier1104]

How did this turn into a debate on the best methodology to pay off large bill i.e. truck loans, student loans and stuff of that nature. How come you could just say 'Good shyt man.' or something of that nature. The end result will be that same regardless of the process I take, IT WILL BE PAID OFF BY THE END OF THE YEAR.

 

[fastpakr]

We're all happy for you. Seriously. Congratulations, I mean it!

Still, it's just average thread drift. Nothing new, happens every day.

 

[hoosier1104]

I know. I meant nothing by it. Just no one said anything of that nature until you did just now.

For everyone else.

 

[DRanger024]

I tried to get it back on track...congrats on getting it down to the last 8! I know I was super exited to make my second to last payment. I'll be even more excited when I walk into the bank and hand them the last 600 bucks! Release my lien NOW!

 

[--weezl--]

I was pretty stoked when I paid off my consolidated last year, a month after I dropped like a 1500$ tax return on it!

I'm making $50 payments on my credit card every two weeks, which works out to like 110$ a month, with a minimum of 80$ a month, and that will probably bump up if I get this new job....


Also, how did it get off track? Because this is Trs...


Sent from somewhere naughty!

 

[hoosier1104]

Thanks. I am just excited because it will boost my score high enough that I can buy a house. I currently sit 5 points shy of what I need.:banghead:

Sent from the front seat of my Ranger using Tapatalk.

 

[doorgunner]

Hoosier.....I just got back from a roadtrip & didn't have time to read all the posts...congrats again on paying the truck off this year....

(man! it's weird that the thread is still on track.....)

 

[Plum Ranger XLT]

I can't wait until I get mine paid off, I got 15 more payments left. Congrats on getting it paid off.