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Posted in Student Loans
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Question By
blalonde52

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6 People Helped
What debt to pay off first?
I am 19 years old and just got a nice promotion at work. I have a 713 CK score and almost 2 years of credit history. I currently have 9k in debt for student loans and a car loan with 7.2k left on the balance. My car loan carries a high interest rate (10.4%) and my student loans are right around 6%. What should I pay first? I want to save for a down payment on a home, but am I better off paying off both debts before I buy a home?

My current plan is to pay the minimum payment on my student loans and put any extra money towards my car. Is this the best plan?

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You have a Good Plan!
1) Pay off your Car loan as fast as you can.

2) then put everything at the Student Loan.

3) Then start saving everything you can.

      you want 3 to 6 Months in Savings for Emergency, then save for a House.

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Yes, at this point you will be lowering your debt to income ratio which will help tremendously when purchacing a home. Your credit is exellent. Do some research on FHA loans.... In my opinion they are the best loans to apply for right now. Only require 3% down on the total loan value. Continue to take your time! You are on the right track, don't act hasty and ruin all your hard work.. Good luck my friend...

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