Monday, May 18, 2015
Why pay high int. Rate first?
I've read on multiple websites that paying off your loans with the highest interest rate first is always best and that if two loans are of the same rate but different principle it doesn't matter which you pay first.
I'm confused because based on my math this is definitely not true. Am I missing something?
Here's what I have.
1) A 10 year loan of 20k at 7%
2) A 10 year loan of 15k at 3%
3) A 30 year mortgage of 100k at 5%
If I have $1,500 a month that I WANT (I'm ignoring retirement here) to go toward loans would it not be most advantageous the put the extra almost $500 toward the mortgage each month?
Whatever I'm doing is showing like 60k less in interest over 30 years…
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