Prioritizing Debt Payoff

[Absidey]

Edit: I figured it out, sorry. I made a mistake on one of the interest rates that made it seem like another option might work better than it actually would, which is why I was so perplexed by the way the numbers were totalling out.

Thanks for the advice!

[msuroo]

It depends on your ability to accumulate the necessary savings outside of your current bill payments. All else equal, you generally want to pay off high interest balances first - this will lead to the lowest cash outlay over the long term. Then again, if the only way you're going to be able to raise enough capital for your tax/balloon payment is to focus all of your efforts on the lowest balance such that you can free up some liquidity, then that's the route you have to go. Paying 1.9% on outstanding debt is obviously preferable to 6.03%, but 6.03% is better than having your truck repossessed. There's also an emotional lift that comes with paying something off, which is one reason a lot of people go for the lowest balances first (even though it costs more).

[Jrock817]

The is a great website, whatsthecost.com. It introduces the "snowball" effect, I started using it about two years ago, and I love it. You basically set out your payments, higher interest first, and once debts are paid off, the payments can go to the next highest interest rate. Check it out, really helped motivate me in light of all of my student loans.