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Offline franksolich

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Tobin questions paying down debt
« on: March 03, 2015, 05:04:54 PM »
http://www.democraticunderground.com/1121708

Oh my.

The quandaries one finds oneself in, if one's a huge overall-wearin' Hoosier truck-drivin' man.....

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Tobin S. (7,419 posts)    Tue Feb 17, 2015, 08:02 PM

Question on paying down debt.
 
I have a personal loan with a balance of about $15,700 and a credit card with a balance of about $17,700. I can pay down one of the loans by $5000. Both loans are at 9.99%. The payment on the personal loan is $463 fixed and the payment on the credit card is currently at about $310 a month.

Which loan should I pay down first? Does it matter? Please elaborate with your reasoning. 

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In_The_Wind (60,357 posts)    Tue Feb 17, 2015, 08:11 PM

1. If it was up to me: Pay down the credit card bill first.
 
That way if you need to use the money again  you already have it.

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Kali (40,595 posts)    Tue Feb 17, 2015, 08:15 PM

2. Hi Tobin

I am no expert by any means, but I just opened DU and saw this on the Latest page. I would think probably the credit card - and it also depends on the card's limit. Aren't the favorable numbers for credit card debt around 30 to 50% of limits?

Either way I would think having more credit available there would be more flexible in terms of future needs/emergencies.

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Tobin S. (7,419 posts)    Tue Feb 17, 2015, 08:25 PM

3. You and ITW have similar reasoning
 
The credit card is near the limit of $18,800. I had basically maxed that one out while in school. The good news is that I haven't added any new debt in about 6 months and I've payed some stuff down. 

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In_The_Wind (60,357 posts)    Wed Feb 18, 2015, 10:02 AM

4. Another good thing about paying down your credit card balance: Your monthly payments will drop.
 
There by giving you more cash in hand each month.

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lastlib (6,217 posts)    Wed Feb 18, 2015, 04:23 PM

5. My question is: Which one is costing you the most?
 
How much of the personal loan payment is interest? I can't calculate the total interest without knowing how long you have to pay the personal loan, but from the rough calculations I made, it looks like the credit card is the one that is declining the least with the payment you're making. So, odds are, you'll wind up paying more interest on it over the long haul if you don't pay it down. I'll join the others in saying you would be better off paying it down now. Once you get it down to a level that it's costing you less in monthly interest than the personal loan, start paying more on the personal loan. Guiding principle: pay down the one that is costing you the most in interest and fees.

My grandfather liked to say that paying interest was like buying a dead horse. You don't really get any good out of that money. So the best strategy is to reduce the interest as much as possible. Any extra you can pay on principal saves you $$ in the long run.

<<<suspects the primitive's grandfather wasn't a primitive.

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Tobin S. (7,419 posts)    Wed Feb 18, 2015, 06:03 PM

6. Thanks, lastlib. That makes sense.
 
Yes, even though the payment on the personal loan is higher, more of that payment goes to the principle. It was a seven year loan on $25,000 and I have about 3.5 years to pay on it. I suppose the credit card debt could turn into something akin to a mortgage if I don't get on top of it. 

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lastlib (6,217 posts)    Wed Feb 18, 2015, 07:05 PM

7. yeah, that one can explode on you,
 
especially if you just happen to miss a payment date for some reason. Credit cards tend to be rather predatory, IMHO, particularly so if you don't keep them up to date.

<<<has no idea what'd be like, having $32,000--or even a tenth of that amount--in debts.

Damn.
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Offline Carl

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Re: Tobin questions paying down debt
« Reply #1 on: March 03, 2015, 05:11:25 PM »
Yet he claims to work for a trucking company that uses 30 year old trucks. :whatever:

Am surprised no one at the DUmp has suggested just sticking it to the creditors.
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Offline thundley4

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Re: Tobin questions paying down debt
« Reply #2 on: March 03, 2015, 05:12:58 PM »
The DUmmie should pay down the personal loan, and forget about the credit card debt.  They most likely only make minimum payments on the CC and that will never be paid off.  So throwing a big lump sum payment is just wasted money.
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Offline 67 Rover

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Re: Tobin questions paying down debt
« Reply #3 on: March 03, 2015, 05:15:21 PM »
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Tobin S. (7,419 posts)    Wed Feb 18, 2015, 06:03 PM

6. Thanks, lastlib. That makes sense.
 
Yes, even though the payment on the personal loan is higher, more of that payment goes to the principle. It was a seven year loan on $25,000 and I have about 3.5 years to pay on it. I suppose the credit card debt could turn into something akin to a mortgage if I don't get on top of it.

 :o :thatsright:
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Offline Texacon

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Re: Tobin questions paying down debt
« Reply #4 on: March 03, 2015, 05:24:19 PM »
Where'd the $5k come from??

And if he's only paying $310 on a $18,000 balance on a CC ... he's a dumb ass.

KC
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Offline franksolich

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Re: Tobin questions paying down debt
« Reply #5 on: March 03, 2015, 05:26:30 PM »
Quote from: Texacon on March 03, 2015, 05:24:19 PM
Where'd the $5k come from??

And if he's only paying $310 on a $18,000 balance on a CC ... he's a dumb ass.

KC

Anticipated income-tax refund, maybe?
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Milo Yiannopoulos "It has been obvious since 2016 that Trump carries an anointing of some kind. My American friends, are you so blind to reason, and deaf to Heaven? Can he do all this, and cannot get a crown? This man is your King. Coronate him, and watch every devil shriek, and every demon howl."

Offline obumazombie

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Re: Tobin questions paying down debt
« Reply #6 on: March 03, 2015, 06:15:01 PM »
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Tobin S. (7,419 posts)    Tue Feb 17, 2015, 08:02 PM

Question on paying down debt.
 
I have a personal loan with a balance of about $15,700 and a credit card with a balance of about $17,700. I can pay down one of the loans by $5000. Both loans are at 9.99%. The payment on the personal loan is $463 fixed and the payment on the credit card is currently at about $310 a month.

Which loan should I pay down first? Does it matter? Please elaborate with your reasoning.

These guys apparently have never heard of Dave Ramsey or Suze Orman.
Dave likes to tell his listeners that he gives advice your grandmother would, except with his teeth in.
Inotherwords it's common sense about replacing bad habits with good habits, making your money work for you instead of you being a slave to money.
But then again it's Dummies we're talking about.


Now as I recall Tobin just quit smoking. Maybe it was a $5,000.00 habit ?


edit: add
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Offline JohnnyReb

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Re: Tobin questions paying down debt
« Reply #7 on: March 03, 2015, 06:23:40 PM »
Pay the minimum payment on the credit card and buy a new car....the world owes it to you DUmmie.

Hey, that's the democratic approach to managing national debts so it should work on a smaller scale...right?...right?
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Offline GOBUCKS

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Re: Tobin questions paying down debt
« Reply #8 on: March 03, 2015, 06:58:11 PM »
Split the $5K in half.

Spend half on weed, and the other half on lottery tickets.

For a democrat that's a win-win solution.
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Offline landofconfusion80

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Re: Tobin questions paying down debt
« Reply #9 on: March 03, 2015, 09:26:07 PM »
The reason the rich get rich and the poorer get poorer is the poor make bad financial decisions.  The primitives prove this out on a daily basis. 
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One Who Grows (244 posts)
20. absolute bullshit. the cave is unspeakably vile.

I don't know how any of you can live with yourselves.

:)
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