Jmays2k

Hey guys just wanted a little advice as to which bills I should pay off first and why?

1. My s2000 Has a pretty high interest rate and if paid off will free up around $300.00 a month but the pay off is about $3000 more then option 2.

2. Pay of my fiance's ring and gym membership Both low interest will free up around $240.00 a month but will have $3000 more in my account then option 1.

Thanks for the advice

rhino2515

#2, than take the $240 and apply that towards #1 every single month.

s.hasan546

^ No. always pay off the higher interest loans first if you can.

Gatsbee13

agreed.. get rid of that high interest loan..

rhino2515

Sounds like you can payoff the ring and gym membership fairly quickly compared to your auto loan which is more of a long term debt. After paying off the ring and gym, u have $240 to apply on to principle of the car note on a monthly basis. You would end up saving money on interest paid and paying off the loan quicker, as less interest accrues when there is less of a principle balance. Another option you could look into is refinancing your auto, as long as the loan to value is there and your credit doesn't suck, most credit unions will lend. Just dont expect your rate to be 2.99% or anything of that nature.

s2000Junky

#1 no brainer, not just because it’s the largest interest (which isnt always the most critical factor) but because it will free up the most cash/leverage to then pay down other debt sooner, which is sometimes more important then paying off higher interest first, you just need to do the math. But putting both of these factors together in your case of a higher interest plus larger payment, again it’s a no brianer.