*The Dave Ramsey 'Baby Steps' Thread*

[WDW_fan_in_TX]

No 23.9 percent is really high not a little high. You have made progress but the car payment is a real beast. At this level, as Dave Ramsey says, you are eating beans and rice, and not being in a restaurant unless you are working on one. Every time you want to eat out have a picture of the payment and interest to remind you and DW your priorities. Keep the momentum

Exactly. We've cut way, way back on eating out. I basically just go out once a week for work (we got out one day a week and have a meeting at lunch, and we have to pay for our own). Then we go out Sunday after church with friends. Otherwise, it's chicken, salad, veggies, pasta, meat loaf. cheap stuff at home.

Our road on paying debt will be:
Bank loan, $1,800 (11% interest);
Photo loan, $1,200 (0% interest);
Car Loan, $14k (23% interest);
School Loan, $19k (4.25% interest).

Then after that, we'll hit medical debt.

 

[huggybuff]

Exactly. We've cut way, way back on eating out. I basically just go out once a week for work (we got out one day a week and have a meeting at lunch, and we have to pay for our own). Then we go out Sunday after church with friends. Otherwise, it's chicken, salad, veggies, pasta, meat loaf. cheap stuff at home.

Our road on paying debt will be:
Bank loan, $1,800 (11% interest);
Photo loan, $1,200 (0% interest);
Car Loan, $14k (23% interest);
School Loan, $19k (4.25% interest).

Then after that, we'll hit medical debt.

I already searched online, but what's a photo loan?

 

[WDW_fan_in_TX]

I already searched online, but what's a photo loan?

Basically, the short of it is my DW got professional pictures made and put it on a payment plan. So we're paying x amount per month until the $2k is paid off. She got them done in October, and repayment plan is about halfway done.

 

[TDK44]

I would encourage you and anyone else in this situation to educate themselves on how credit scores populate.

You have two very low limit, low account history cards. One with a large monthly fee attached to it.

Once debt is closed (credit cards, loans, etc) they remain on your credit history for up to ten years after closure.

Do people stop paying student loans or car loans to keep their credit score up and their credit history of paying available? No. That would be incredibly unwise, and creditors would be able to see on your credit report if you paid on time, etc even after you finished paying off a loan for up to 24 months.

What will help your credit score more is by paying the car loan, personal loan, and school loan on time. Having payments on loans more than 30 days late will damage your credit score, but not plummet it unless it is done consistently.

Please don’t make assumptions as to what will happen if you close two tiny credit allowances. Your score might go down, but as long as you keep on your other payments, it will continue to go up.

Credit scores are great if you need to take a loan out. I hope you don’t need to take any further debts on at this point for you.

Close the cards.

This is bad advice.

 

[Willow Ufgood]

Exactly. We've cut way, way back on eating out. I basically just go out once a week for work (we got out one day a week and have a meeting at lunch, and we have to pay for our own). Then we go out Sunday after church with friends. Otherwise, it's chicken, salad, veggies, pasta, meat loaf. cheap stuff at home.

Our road on paying debt will be:
Bank loan, $1,800 (11% interest);
Photo loan, $1,200 (0% interest);
Car Loan, $14k (23% interest);
School Loan, $19k (4.25% interest).

Then after that, we'll hit medical debt.

Why would you prioritize paying off the 0% photo loan? Is it one of those kinds of loans or balance transfers that balloons up to a high APR after a certain time?

Looking at the order you've listed, I suspect that you're not following DR 100% because the order of priority would be different with the photo loan being #1 and the bank loan being #2. But that's okay as long as it works for you. Personally, I would be throwing every extra cent at that auto loan because of the extremely high APR. The amount of interest you're paying every month is a killer.

 

[WDW_fan_in_TX]

Why would you prioritize paying off the 0% photo loan? Is it one of those kinds of loans or balance transfers that balloons up to a high APR after a certain time?

Looking at the order you've listed, I suspect that you're not following DR 100% because the order of priority would be different with the photo loan being #1 and the bank loan being #2. But that's okay as long as it works for you. Personally, I would be throwing every extra cent at that auto loan because of the extremely high APR. The amount of interest you're paying every month is a killer.

put it in thr put it