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what to pay first

Date: Fri, 11/30/2007 - 08:33

Submitted by anonymous
on Fri, 11/30/2007 - 08:33

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Total Replies: 4


i have a huge amount of debt. am able to pay everything on time. want to put some extra to start paying down my debt. what bills do i try to pay down first?


Good question. There are normally two ways to tackle the debt. They are pretty similar.
The first is to look at all your debt and compare interest rates. The one with the highest interest rate gets paid off first. You put all the extra money you can into that one debt. Then when it is paid off you take the monthly payment you were paying toward that debt plus the extra and put it toward the debt with the next highest interest rate. Until all debts are paid off.
The second is to take the debt with the shortest payoff time. So look at all your debt and see which one has the fewest number of payments left. Put your extra money toward that one and when it is paid off put all the money toward the debt that can be paid off the next fastest.
Most people on this plan can get out of debt in 5-7 years. If you can put all your extra income toward your debt. Based on debt to income ratios.
Good luck and keep at it! It's worth it.


lrhall41

Submitted by melissa_lawton on Fri, 11/30/2007 - 08:58

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