I'm 26, just bought first condo and looking to get out of debt ASAP. At the moment, I have $500-600 left over after all bills and expenses are covered. I'm a nurse and hope to pick up a couple extra shifts a month (easy to do, they ALWAYS need staff) to bring in at least another $500 to pay off debt.
Condo Mortgage: 60K @ 4.9% over 30 years.
Student loans: 20K average rate of about 6.25% Not sure how many years left. They were originally 10 years but I've paid down 15K already and they're often deferred because I was too low income then I keep going back to school (But letting the job pay for it this time!) If I had to guess, I would say 7 years left. They should be deferred until Dec 2015 with only 5K accruing interest 6.8% right now.
After I have a healthy emergency fund, what should I do? Many say I should pay the student loans because the interest is higher and I can't bankrupt that.
But that mortgage is over 30 years and my entire payment is going towards interest right now. Every extra I penny I send them is actually paying off the loan. I did the math and even just $200 extra a month pays off the mortgage in 15 years and saves 33K in interest payments!
I honestly have no intention of selling the condo so paying it off is a must. I got it for a steal. I can't rent it except to family so (Lord willing) I want to pay it off and give my mother a good place to live when she retires in 10-15 years and wants get out of her old house in the ghetto.
Read more: Which loan(s) should I pay off first?
