Opinions on which debt to pay off first

[ReneeA]

Little bit of back story - DH was laid off a couple years ago for 8 months, and was eventually called back to his job - part time (unless there's more work to do), no bennies. I was in school full time, but picked up a part time job at that time after staying home with kids for 6 years. It's been rough for a few years around here. We incurred quite a bit of debt just trying to make it through after being close to debt free prior. Detroit hasn't been a kind job market for awhile.

Now, I am done with school and a RN (as of a month ago!!). I have a great job on a unit I've worked on for a year. The hospital I work for offers loan forgiveness, so all of my student loans have been paid off as of last week. DH has been working full time for a couple months again. We had 4 small credit cards totalling $2400 - those were paid off last week.

There are only large ones remaining:

a personal loan (13.9% interest) through the credit union for $9800 - payment of $445 a month

Chase Disney rewards card (17% interest) for $8000 - min payment $180 a month

One more credit card with a large balance and a small interest rate (1.9%)that's good for another 11 months through our credit union - (min payment $120/mo). This will be the last one I pay off due to the small interest rate and small payment.

Which should I go after first - personal loan or Chase? I think Chase, DH thinks the loan. He thinks the loan because of the huge payment, I think Chase because they have been so unpredictable by hiking interest rates and upping payments, etc. Our credit union has been more than fair with us, and are extremely reliable when it comes to interest rates, etc.

What's everyone here think?

 

[wdwfan16]

Little bit of back story - DH was laid off a couple years ago for 8 months, and was eventually called back to his job - part time (unless there's more work to do), no bennies. I was in school full time, but picked up a part time job at that time after staying home with kids for 6 years. It's been rough for a few years around here. We incurred quite a bit of debt just trying to make it through after being close to debt free prior. Detroit hasn't been a kind job market for awhile.

Now, I am done with school and a RN (as of a month ago!!). I have a great job on a unit I've worked on for a year. The hospital I work for offers loan forgiveness, so all of my student loans have been paid off as of last week. DH has been working full time for a couple months again. We had 4 small credit cards totalling $2400 - those were paid off last week.

There are only large ones remaining:

a personal loan (13.9% interest) through the credit union for $9800 - payment of $445 a month

Chase Disney rewards card (17% interest) for $8000 - min payment $180 a month

One more credit card with a large balance and a small interest rate (1.9%)that's good for another 11 months through our credit union - (min payment $120/mo). This will be the last one I pay off due to the small interest rate and small payment.

Which should I go after first - personal loan or Chase? I think Chase, DH thinks the loan. He thinks the loan because of the huge payment, I think Chase because they have been so unpredictable by hiking interest rates and upping payments, etc. Our credit union has been more than fair with us, and are extremely reliable when it comes to interest rates, etc.

What's everyone here think?

I agree with you - Pay of the highest interest rate.

What does the 1.9% go to after 11 months?

 

[soonerfan2008]

I would do the loan. If Chase ups your interest rate, you can close the account and keep your old rate until it is paid off. Also, if you put every bit of extra $$ into the loan, it will be a much bigger payment you can roll onto paying the credit card when the loan is gone.

 

[smkiya]

I would pay off Chase first.

 

[ReneeA]

I agree with you - Pay of the highest interest rate.

What does the 1.9% go to after 11 months?

According to the credit union website, 9.9% as long as I make payments on time. I've always made sure to do that, which is why we still have great credit scores despite the huge debt we amassed during the last few years.

 

[wdwfan16]

According to the credit union website, 9.9% as long as I make payments on time. I've always made sure to do that, which is why we still have great credit scores despite the huge debt we amassed during the last few years.

I just wanted to make sure that it was not going to be high. Then I might have to rethink my answer. It seems this is the last one to pay off. Good luck.

 

[MnMomtoboys]

According to the credit union website, 9.9% as long as I make payments on time. I've always made sure to do that, which is why we still have great credit scores despite the huge debt we amassed during the last few years.

will this be paid off in 11 months? I'm just wondering if you should make sure you pay this off in that time frame.

And I also think Chase.

 

[blana]

Chase. I'm assuming with the higher payment on the loan that it's not a real long term, anyway, right? So, put the extra towards the higher interest rate, and you won't have very long left on the loan, anyway.

 

[ReneeA]

Chase. I'm assuming with the higher payment on the loan that it's not a real long term, anyway, right? So, put the extra towards the higher interest rate, and you won't have very long left on the loan, anyway.

I believe we have 2 years left on the loan.

I have $2500 a month to put toward paying down the debt, so I should have Chase paid off by August 1st. Fingers crossed that nothing pops up between now and then!!

We started with $43,000 in debt (including the student loans). My plan is to have the remaining $30,000 paid off within 14-15 months.

 

[Ryansdad0727]

I would pay off the smallest loan first. This happens to be the one with the highest interest rate also. Your personal loan will be paid in 2 years without even making extra payments on it. It would take much longer to pay off the CC making only minimum payments. Should be able to get both paid in 2 yrs maybe then go after the big stinker. We just paid off my wife's car so we are excited to only have the house left. Good luck.

 

[RooRach0906]

This is just what I would do and its all if you can afford it. I would focus on getting the Chase paid off first but also if you can afford it pay $500 a month on the other loan its amazing how far the extra $55 a month will add up on getting the loan paid faster anyway.
Congrats on becoming a RN that is an awesome accomplishment.

 

[comicguy]

I would payoff the Chase CC first then the other CC and finally the loan.

It seems by what you say the loan will be paid off in the next couple of years anyway, so go with the CC's as they will more than likely increase their rates/min payments with little warning. JMHO

 

[ReneeA]

I would payoff the Chase CC first then the other CC and finally the loan.

It seems by what you say the loan will be paid off in the next couple of years anyway, so go with the CC's as they will more than likely increase their rates/min payments with little warning. JMHO

I'm hoping to have ALL of it paid off before the terms of my loan are up. Our income has more than doubled, but we are continuing to live on the budget we were on before I graduated, so as long as things stay okay we should be able to get it paid off within 15 months.

I did promise my kids a trip to Disney while I was in school because they suffered along with us. I've been picking up one OT shift a pay to pay into my vacation account for our trip in August.

 

[SleepyatDVC]

Congratulations on becoming a RN! And on getting your financial situation turned around!

I, too, would concentrate on the Chase CC first. Play with some debt calculators - I'm sure you can find some free online by googling it. You might be able to find out the exact time it would take you to pay off each debt and how much total interest will be paid based on your monthly payments.

Make a plan and stick with it.

GOOD LUCK!!!

 

[dd50]

I would pay Chase off first for two reasons. First, if you haven't had your credit line decreased it will probably happen and it will look like you are at the max of your credit which brings down FICO. Secondly, credit cards account for more on FICO then personal loans. Chase hasn't been playing nice the last few years.

 

[ReneeA]

I would pay Chase off first for two reasons. First, if you haven't had your credit line decreased it will probably happen and it will look like you are at the max of your credit which brings down FICO. Secondly, credit cards account for more on FICO then personal loans. Chase hasn't been playing nice the last few years.

Honestly, I'm shocked our FICO hasn't been decreased yet. We both have an 800 or better credit score.

 

[DeniseinNS]

I would pay off the one with the highest interest first.

 

[momoftrips]

Go to daveramsey.com His method is to use a debt snowball. Start with the lowest amount first (no matter the interest) and pay that off. That will start the awesome feeling of paying something off. If you start with a higher one it gets frustrating not seeing the bill go away. Then take the payment of the paid off bill and add it to the next lowest one, your Disney. Now you will be paying $300 a month on that. He also has calculators on his site to help you figure how long it will take.
Call Disney and ask for a lower rate. I usually say I like their card but have gotten offers for a lower rate but I would like to stay loyal to them. It is better to keep a old customer happy then get a new one!
That is my 2 cents!