Student loans + credit cards :,(

[marceystarr01]

Can someone please advise me on how/where to apply my money on these loans and debt. I pay the minimum for each, plus add a few hundred to some. In total minimum payments, I have $933.94. I pay $746.06 extra but not on one. I spread this money around a bit so its not really concentrating on paying just one. This is my debt (MP stands for minimum payment, extra is what I've been paying extra):

Wells Fargo Stuent Loan: ($28,269.94 @ 8.24% + $22,007.41 @ 10.24%) = $50,277.35 MP: $549.70 Extra: $450.30 TOTAL = $1,000.00 (not sure if I can say how much of a payment goes to which)

Federal Loan 1: $1,860.89 @ 6.8% MP: $23.31 Extra: $70.78 TOTAL = $94.09

Federal Loan 2: $5,050.63 @ 4.5% MP: $56.93 Exra: $28.98 TOTAL = $85.91

Wells Fargo Credit Card: $3,400.94 @ 20.55% MP: $150.00 Extra: $150 TOTAL = $300.00

Personal Loan: $1,288.74 @ 14.74% MP: $184.00 Extra: $16.00 TOTAL = $200.00 So my question is what order should I put these in.. as in which should be my highest priority to pay first and second, etc. in order to get done quicker and save the most money? Any advice would be greatly appreciated.

[greenskeeper]

I would knock out the personal loan in 2 months, send your extra $700 or so a month to that loan only.

Then I would go after the Credit Card. Again throw the whole $700 at that each month. Once paid off, cancel it and cut up the card.

As far as the student loans, have you looked into consolidating them into one larger loan at maybe a lower interest rate?

Since you have $700 a month to pay additional, you should make progress rather quickly.

If you can cut expenses and put more towards the debt, even better.

Good luck!

[breathemusic]

It's a matter of preference, but I'd go for the CC first just because it has such a high interest rate. Though I can see the merrits of paying off the personal loan first since you could do it quickly and reduce the amount of your minimum monthly payment sooner.

One thing I suggest that many people note, is after you pay something off, since it will free up extra money, put that extra money toward the rest of the debt.

Also, any time you send in an extra payment that goes toward multiple loans, you should be able to specify which loan. So in the case of the Wells Fargo loans, if you were to include a memo or a note of some sort that said to put all of the extra money toward the principle of the loan with the higher interest, then that's what they should be doing.

I agree with the poster above that it might be worth trying to consolidate first. It seems like your student loans have really high interest rates. Is that the norm these days? I just graduated a few years ago and my citibank loans are down to about 3.25% interest.

[dczech09]

I ran the numbers. Mathematically speaking, it makes more sense to knock out the credit card first. By knocking out the personal loan first, then attacking the credit card, you would pay $249.78 in interst. By going after the credit card first, you would only pay $203.67.

Killing the credit card first will also make the process quicker by one month. So pay minimums on everything, except the credit card. Put your minimum, plus extra on the credit card ($150 + $746.06). Once the credit card is gone, focus all extras on that personal loan.

Here is the order to attack:
Credit Card
Personal Loan
Federal Loan 1
Federal Loan 2
Student Loans

It is going to take some time to clean up your mess, but you should be able to knock out all debts (except the two large student loans) in about one year.

If you have any extra money that you come across, throw them at your debt payoff too.

Now I have a question for you:
Where did these loans come from? How did you get into debt in the first place? Do you have a plan to stop new debt from coming in? Is the credit card a temptation of yours? Do you need to cut up the credit card?

The reason I ask is because paying off debt is futile if you do not have a plan to stop the debt from coming back.

Also, do you have retirement savings going? Emergency fund?

If I were you, I would make sure I have AT LEAST $1,000 saved for emergencies before attacking the debt. THEN, I would spend this one year to knock out all of this debt (except the two large student loans). Once you have done this, then evaluate your other financial stuff.

Ultimately I just want you to make sure that you are taking care of other things while you are paying off debt. Focusing on debt payoff is cool and all, but you don't wanna be that person that wakes up a few years later with no debt, but also no savings or retirement.

[YLTL_Dan]

Your credit card interest rate is killer... have you tried transferring the balance to a 0% or at least lower APR card? I'd try that first.

Besides that, I agree with greenskeeper.

[auron]

I agree with the poster above that it might be worth trying to consolidate first. It seems like your student loans have really high interest rates. Is that the norm these days? I just graduated a few years ago and my citibank loans are down to about 3.25% interest.

Federal Student loans are pretty standard at 6.8% nowadays especially since Congress doesn't seem to want to extend the SL Rate Break legislation any longer.

To the OP: as other have said, STOP! Don't incur any more debt. Pay minimums on all your loans and all extra goes to the highest interest loan until it is gone and then shift to the next.

Note:the Federal Student Loan interest is tax deductible (unsure on the private loans) up to $2,500 so your effective interest rate will be slightly lower than you stated.