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Originally Posted by Macruz19 When you have a variety of debt.. always p/o the lowest balance first, and then use that monthly payment amount that you paid off against for the next loan.
Example...
P/O
1. CC $266
2. Car loan
3. School loan
4. Mortgage. |
Logically, it makes sense to pay off the highest interest debt first but it isn't always the best choice. Money is a very emotional thing and if one is deep in debt, they tend not to regard this matter in a very logical manner.
In this case, it would be best to pay off the smallest debt first and build up a snowball, whereby the debt payment per item continually increases until all debt is erased.
Nonetheless, in this very specific case both theories have the same outcome.