Results 1 to 6 of 6
  1. #1
    Expert Forum User The Ultimate London Mom!
    Anonymous's Avatar
    Join Date
    Sep 2007
    Posts
    13,039
    Rep Power
    606

    Question Getting rid of debt...

    My hubby and I are hammering away at our debt and have been for about a year. Debt scares us and we want it gone. We've eliminated a lot of debt (student loans, credit cards, car loans) in the last year and are nearing the end.... So now we have one credit card debt left and one small line of credit as well left to pay off. We want to get rid of this debt so that the only thing that we owe on is our house.

    My question: is it better to pay off the debt with the lowest amount owing first.... or the debt with the lowest interest rate first?
    ~ "A friend is one who walks in when the rest of the world walks out."~

    Anonymous......

  2. #2
    Expert Forum User
    strongmommy's Avatar
    Join Date
    Sep 2006
    Location
    Old North
    Posts
    2,557
    Rep Power
    188

    Default

    Hi there,

    Paying off the debt with the HIGHEST interest rate(s) first is the best approach. You'll save more in interest by getting rid of this/these ones first.

    It sounds like you have a plan to repay that's working - so kudo's to you!

  3. #3
    Junior Member prilehavost's Avatar
    Join Date
    Feb 2008
    Location
    Whitehills, NW London.
    Posts
    665
    Rep Power
    49

    Default

    Quote Originally Posted by happymommy View Post
    Hi there,

    Paying off the debt with the HIGHEST interest rate(s) first is the best approach. You'll save more in interest by getting rid of this/these ones first.

    It sounds like you have a plan to repay that's working - so kudo's to you!
    ITA...pay off the debt with the highest interest rate first. Congratulations to you! We were debt-free briefly this year...then the wind blew off our roof, and here we are in-debt again.
    "Be who you are and say what you feel, because those who mind don't matter, and those who matter don't mind."~Dr. Seuss.

  4. #4
    Expert Forum User

    Join Date
    Jun 2006
    Location
    East London
    Posts
    6,114
    Rep Power
    295

    Default

    Another taught suggestion to pay down debt, is to pay off the debt with the lowest amount owing 1st, while making the interest payments to the other. Once the lowest is payed off, than all the money you had been paying to the lower amount is applied to the last one plus the normal amount (the interest) you had been paying.

    If you had more than two bills to pay off, then the payment plus interest is applied to the next lowest and continues until you are at the final bill, with all the monies being applied.

  5. #5
    Expert Forum User
    tansie's Avatar
    Join Date
    Jul 2006
    Location
    Strathroy
    Posts
    9,576
    Rep Power
    529

    Default

    ITA about the HIGEST intereset paid off first. You may also want to cnsider paying off your credit card with your credit line - if you have room to do so. It's likely that your LOC has a lower interest rate than your CC. If you do do that, just make sure to still make the same total $ pymt to your LOC that you would have been making to both debts.
    www.southhilldesigns.com/carolwood
    www.facebook.com/charms2last.carolwood


    The devil on my left shoulder wants me to reply, but the angel on my right shoulder is screaming: filter.....FILTER! - unknown


  6. #6
    New Member
    Join Date
    Feb 2009
    Posts
    1
    Rep Power
    0

    Default

    Good morning Happy Mommy. It is always best to pay off the debt with the highest interest rate. That being said, if the loan is for investment purposes, the interest can be written off on your personal income tax return. I would recommend that you go over the numbers with your accountant.

Similar Threads

  1. claiming bad debt
    By illek in forum Ask the Accountant
    Replies: 1
    Last Post: 02-21-2009, 06:09 AM
  2. Debt consolidation?
    By ~*Tiffany*~ in forum Chit Chat
    Replies: 1
    Last Post: 12-11-2008, 04:06 PM
  3. Anyone in debt?
    By newmum2 in forum Chit Chat
    Replies: 29
    Last Post: 06-12-2008, 11:19 PM
  4. Debt Consolidation - Loans, Debt Management, Consolidate loa
    By stidgimurgida in forum General Support/Advice about the Kids!
    Replies: 0
    Last Post: 08-09-2007, 01:15 AM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •