Am trying to decide which debt is better to pay off first. This one above I ask about is highest APR, but I have another with a low balance of $300+ debt with a 21% APR.
PLEASE TELL/SHOW ME HOW TO CALCULTE THIS SO I CAN apply this to other debts.
I've heard some schools of thought say to pay off the highest interest debt first, but also have heard to pay off lowest balance debt first and then apply that same amount to the next debt in line balance-wise.
I'm dealing with a 50%+ debt ratio and really want to pay down as fast as I can. My income is fixed and I'm not a high-liver.
My problems stem from being shut-in and a compulsive ebayer. It makes it really easy to have my needs delivered right to my doorstep since I can't drive any more. I know...I have to get THAT PROBLEM under control SIMULTANEOUSLY ! I've got wonderful WILL POWER, NOW LET'S SEE HOW GOOD MY "WON'T POWER" IS
I KNOW I CAN DO THIS !!! JUST NEED YOUR HELP IN FINDING OUT THE BEST WAY!
2007-02-19 10:30:35 · 6 answers · asked by MJ D 3 in Business & Finance ➔ Personal Finance
Handling money isn;t as mucha bout math as it is behavior...if it were math we'd all be rich (and would never borrow money at 25%)
Since we are dealing with behavior it is vital to reinforce the good behavior. This being said you should list out your debts from smallest to largest amount owed....pay the minimum on everything except the smallest debt to which you attack with as much money as you can. Paying off that first bill feels great, now you can snow ball tha tmoney toward the next smallest on the list....keep this going till they are all gone.
Right now you have an elephant of debt, you can't eat an elephant all at once, you have to eat it a bite at a time. Focus your money (and energy) ont he smallest and work up...the snow ball grows bigger and bigger and the end will becoem cleaer and clearer.
It behavior....not math....change your behavior, reinforce the good behaviors.
Check out the Total Money Makeover for a detailed, PROVEN plan to becoming debt free www.daveramsey.com
2007-02-19 10:59:44 · answer #1 · answered by Anonymous · 0⤊ 0⤋
At 24% interest you are paying 2% per month in interest the rest of the $110 will go to principal. Although my figures are not accurate you will come close to the right time.
Should of read everything before I started. In your case pay the minimum on the 23.75% bill for the first 3 - 6 months. Pay as much as you can on the 21% bill. By paying this off in full you put yourself in a safer position. After the 21% bill is paid apply all of the moneys to the 23.75%.
Your condition only feel bad because you are on a fixed income.
Hang in there.
2007-02-19 10:53:11 · answer #2 · answered by whatevit 5 · 0⤊ 0⤋
PAY AS MUCH AS YOU CAN to the higher-rate card... if you pay the minimum balance, you barely make a dent in the principle and end up paying the interest which pretty much goes on forever. Pay off any student loans LAST because interest is tax-deductable and is the lowest loan rate you'll ever come across. If these are credit cards, try to find a 0% interest card and transfer to that BUT DO NOT MAKE PURCHASES as these have the APR applied to them and are paid off LAST (because your money goes to the lowest-rate debt... that's the way these work because it makes the creditcard companies the most money). You may want to check out the Suze Orman Show on CNBC or listen to Clark Howard on the radio (he's syndicated). You shouldn't cut up ALL of your cards because your credit score is determined by the length of your loans (cards) and your debt-to-credit ratio... pay down your debt without incurring further debt. Try to pay for things in cash (so you don't overspend) and use eBay sparingly.
2007-02-19 10:40:49 · answer #3 · answered by Anonymous · 0⤊ 1⤋
www.bankrate.com has GREAT calculators. I've listed direct links to both of the above mentioned debts. Your $1850 will be paid off in about 21 months and your other would be paid off in 3 months provided the payments are the same.
2007-02-19 11:00:44 · answer #4 · answered by JC 2 · 2⤊ 0⤋
You should check out my website to tranfer your balances to a new credit card that offers 0% interest for a year. And you will also get a low interest rate after. Check it out at
http://www.
freewebs.com/
whowantstoberich
2007-02-19 10:34:39 · answer #5 · answered by whowantstoberich 1 · 0⤊ 4⤋
The average is two decades. (If you always pay the minimum)
2007-02-19 14:53:12 · answer #6 · answered by Anonymous · 0⤊ 1⤋