So, when it comes to debt, you have to prioritize. If you have multiple loans, you must pay off the loan with the smallest balance first regardless of the interest rate. For example, if you have a car loan of $15,000 with an interest rate of 2% and a credit card debt of $30,000 with a 5% interest rate, it seems logical to pay off the credit card first. I mean you are paying more in interest so get that guy out of the way right? Wrong! What you should do is put all of your effort into paying off the car loan first because it is more in reach. Once you pay that off, put all of the money that you were paying toward the car toward paying off the credit card. You will soon see this debt disappear too.
I have two student loans; one big and one small. The larger of the two has a larger interest rate. I have focussed all of my time on the smaller loan though, and I can finally see the end! I am proud to say that in the next year or less, I will have that baby paid off!! Now that is big news. My goal though, get it done sooner. That may be hard though since my best friend is getting married this year and I'm saving for my own wedding, but I'm going to give it a whirl. Watch out big loan, I'm coming for you next! Woohoo!
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