- April 1, 2008 at 7:10 pm #261826
Which has the higher interest? Hit that one hardest. Both are important. The house loan can actually be gotten rid of if you lose your home, but the student loan can’t be dispersed in bankruptcy……….so you might want to think about that. You can never get rid of that student loan without paying for it.
So this is not just about “interest”. It is about paying both of them. I would still hit the highest interest one first with a bit more, but depending on how high that student loan is and the interest is, I would lean towards getting that one paid and off your mind.
Also a house loan can be renegotiated and interest lowered in some circumstances. If you have an adjustable rate loan ARM, negotiate at the time it comes due again, plus if you are not happy with the loan, you can move your mortgage. We did that one time saving over $8,000 in the life of the remaining loan, plus our payments went DOWN.
I am not familiar with student loans and exactly how they work. If you pay on a student loan without missing payments or any lates, they may reduce your interest. dash
Either. Some budget gurus say to use it on the account with the
lowest balance, so that you can get one bill paid down fast and SEE
the results quickly, which, in turn, makes you feel better. Others
say to apply it towards the debt with the highest interest, although
you don’t see the return or result as quickly.
- You must be logged in to reply to this topic.