Which to Pay Off First?

[Elgin526]

Re: Which to Pay Off First?

The furniture stores are real sneaky . I read about 90% of the people that fall for the no interest for a year wind up paying the whole year's interest. I would pay that off as soon as possible.

Put me in that 10% then, I got 18 months 0% on my furnature from JC Penney's and paid it off in 16 months, didn't pay them a dime extra!

[creditcardfree]

Re: Which to Pay Off First?

I'd try to pay extra on the furniture. It really bothers me they won't take partial payments at the same time you are making full payments. Otherwise, I'd be attacking the car loan. To me it doesn't matter about the interest rate...just pay it all off as fast as possible. Good luck!

Another thought, could the furniture be moved or transfered to another creditor, so that you do have the option of paying extra and partial payments. Just a thought.

[poundwise]

Re: Which to Pay Off First?


I'll chime in with this...

You stated: "We need to get a different car (smaller, more reliable) so I'm leaning toward paying off the car loan first then getting something else. We are upside down in payments right now and I really don't want to add that extra onto a new loan."

To me, this is terrible idea. Unless I misunderstand you are basically saying that you will pay off the car in order to buy a new car (with a new loan), thus putting you right back where you are now (except with possibly a better car and also possibly a larger debt.) Is that correct? I sure wouldn't have that as my plan. I'd do all I could to make the present car 'work out' for me and mine, pay it off and keep it, then pay off the credit card. After that, save some money, sell the current car, and buy another car.

My two cents.

[Addendum: If that's too much time used and you really NEED the replacement car sooner. I'd still hang try to hang on to it, pay it off, then save some money, sell the car, and then buy a car outright. Then, by the time this happens, your credit card will be out of the promo period and charging interest. Attack it next. That gives you a better car, no car payment, and attacking the card. Then, the mortgage.]

[howdihi]

Re: Which to Pay Off First?

I would apply for more credit cards about 2 months before you need to pay up yours. Apply to several at THE SAME TIME. The 0% promotions are a dime a dozen right now. Fudge your income a bit (what are they going to do? Call up your employer? NO). Then, when you need to pay it off, do a balance transfer.

Heck, better yet, I would apply right now to several different credit card companies (important...do them all at the same time). I would then have them deposit the money into my checking account (if there isn't a fee to do so...many times there aren't). If they do charge a fee, have them send you a check that way you aren't paying fees for each balance transfer and sometimes you can get these promos without fees. Then, I would pay off the car and the 2nd mortgage. After fees, you should have saved about 1,000.00 for 1 one year time. Just keep paying the minimum on your credit cards and when they are due up again, start all over.

Eventually they will get lower and of course, with the interest saved, you can pay down that debt faster.

I would not do this with 0% offers of 6 months or less, only 9 months minimum, and then
hopefully 1 year.

Sometimes you can get the csr to give you a longer offer or less fees. They make a commission on these transfers.

And, I agree with the above poster. Hang onto your car. Say to yourself, I can live with this for another year. When that year is gone, you may be saying again, I can live with it another year. It will probably save you money to keep it. If you buy another new or used car, you are going to pay taxes and registration onto a car someone probably wants top dollar for. Then, when you feel real comfortable with "where you are at," sell it and buy a new (but used) car for cash.

Just make sure you have the personality to follow through with this and not get yourself into bigger trouble. I have been doing this for years and have saved lots of money.

[greedy4chips]

Re: Which to Pay Off First?

You never stated your income minus expenses besides the debts listed. Do a very solid-tight budget and then read on...

My personal opinion is keep the car, cc, and mortgage current and pay off as much as possible every month on the car loan, furniture loan, credit card and then 2nd mortgage (9+% is sick). Get that reduced somewhere else if you can. I would also find a 0% credit card offer for at least 12 months and transfer the balance of the furniture loan to it. Whatever the rate becomes after the promotional period will always be less than a furniture store loan!

I would find a way to make some money in the meantime. You got yourself into this debt trap and now it is time to work it off and if that seems too hard to do, then you won't find yourself behind the debt-ball again very soon!

We donate plasma and each make $50/wk if we donate twice. It takes about 3 hrs of our time (we live 1 mile away) so we make about $16.00/hr. $400/month gets tossed into a fund which is currently earmarked for 6 month CD's paying 5.46%. My wife delivered pizza for 3 months until she found a full time job at an insurance company. The money was actually very good, about $12/hr with tips + gas money.

There are tons of ways to make a few extra dollars here and there...just look around and you will be suprised how easy it is to make $25 here or there.

[freein2012]

Re: Which to Pay Off First?

Do a very solid-tight budget and then read on...

There are tons of ways to make a few extra dollars here and there...just look around and you will be suprised how easy it is to make $25 here or there.

I have been a budgeter for years now. Our paychecks are budgeted down to the penny. I also work a 2nd part time bookkeeping job and my husband works overtime every day. And I'm also taking college classes (paid for by my employer). We have 5 children so there has to be some at home time with them. So I think the income is as high as it can be right now. My focus the past 6 months has been paying down debt while not adding any more.

With 5 kids, 2 in college, things are always tight, but it's getting better!

[greedy4chips]

Re: Which to Pay Off First?

Ok. Good for you doing all you can work-wise.

Interest on the 2nd mortgage is tax deductible, but I doubt it would offset the difference in interest rates to that of the car loan.

So, basically I believe you must decide between paying off the car quickly. If you believe it is not very reliable then find a more reliable one below your current upside down value. Increasing your debt to get a more reliable car just isn't worth it.

The following advice is only advised if you have discipline to follow and not spend more money. This will also cause some here to cry!

If you continue to receive 0% credit card offers with no balance transfer fees and a minimum 1 yr @ 0% then consider moving your debt to 1 or 2 cards to carry the balance.

Then immediately set them up for online payments. Do whatever it takes to remember to make payments on time. Some even have an autopay feature which makes a predetermined payment on the due date. Great if you are a solid budgeter.

Your objective here is to save yourself approx. $100 per month in interest between the car and 2nd mortgage. (I don't know the length of your loans so it may be more or less)

Debt is debt and where it is doesn't matter that much in the long run. What matters is you are trying to pay them off with every last penny and an extra $100 per month would help, but not save you.

Be sure to move the balance to another 0% card around 10 months into another 0% card.

I wouldn't recommend it unless you have discipline to reduce the balances fast and you seem to have that and you have maximized your income.

You don't have alot of other options besides selling everything around the house that isn't needed or just continuing what you are doing and concentrate on the debt of your choice, moving on to the next and adding all you can to the next debt's payments.

There are other methods to raise money and may work for you. ING Direct has a $25 refer a friend bonus for those who deposit $250 min. into their saving acct. Once you get your acct they allow you to refer up to 50 friends and give you $10 per new acct. Earn up to $500 this way.

Another online bank does a similar offer.

If you choose to do the above I can help you get your referrals, but I think if you ask Jeffrey he would help a little too!

Good luck and keep at it!