What would you pay off the debt first?

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You have 750 per month to go somewhere. Suppose you have an emergency fund fully funded (6 months stay). Suppose also that you do not want to invest money. You have 2 debts, both are tax deductible (student loans and mortgages). SL is much lower interest rates, but a small balance (which could be paid faster way to victory psyhological). Has a higher balance, but also higher interest rates, pay the debt first ($ ‘s spent the usual interest, but additional payments to the fact that I have years left to reduce the loan)?

7 Comments
  1. Reply
    wahoo
    May 2, 2011 at 8:03 am

    I would concentrate on the Mortgage since it is dragging you down financially. You can put a small bit on the SL but the biggest bit goes to the Mortgage. You are saving $ $ in the long run with whittling down the principle

  2. Reply
    Richard Z
    May 2, 2011 at 8:14 am

    Definitely pay off the student loan first. Then you can be mortgage free before you know it!!!

  3. Reply
    Sojo
    May 2, 2011 at 8:17 am

    Richard is right. Pay the student loan off first.
    The paid in full student loan will aid your credit, and it will allow you to return to school if you should desire. It is also the easier of the two.
    The house, on the other hand, will continue to bring you deductions year by year as you maintain it.

  4. Reply
    Adam T
    May 2, 2011 at 8:54 am

    The morgage

  5. Reply
    Jade
    May 2, 2011 at 9:40 am

    yes and no i don’t know why are you asking me

  6. Reply
    Dr. Wu
    May 2, 2011 at 10:04 am

    Unless you are not planning to stay in your home for more than five years add the extra money to the mortgage. This will give you more equity when you decide to sell. If you are planning to stay in your home for more than five years pay off the student loan. Student loans count negatively towards your credit rating. Anytime you can pay off unsecured debt the better you credit rating will be.

  7. Reply
    profissor Bogy B
    May 2, 2011 at 10:59 am

    Certainly paying the SL would take priority in your case, you will get some commitment out off the way, enjoy some psychological victory, also to avoid any interruption to your studying / future.

    I may also suggest to utilize the emergency funds to pay the mortgage, this will prevent the interest build up, saving some $ which may be added to your effort / plan of compensation / recovery of the Emergency Funds in first priority.
    Mike

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