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Old 12-11-2011, 10:27 PM
ransom ransom is offline
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Join Date: Dec 2011
Posts: 1
Default School Loan Payment Priorities

I have about $27,000 in student loans and the way the direct loans services works is the loans are broken down into individual loans with different interest rates and they allow you to put additional payments to specific loans.

I have about $2000 spare to throw at these loans and I know you should pay off the loan with the largest interest rate first, but there are several of them at the 6.55%, but with different balances. Should I attempt to pay off the ones with the largest balances first since they are accruing more interest? What should I do?

The breakdown is as follows:

Group A balance rate
Loan 1 $3,500 6.55%
Loan 2 $4,500 5.75%
Loan 3 $4,961 5.35%
Loan 4 $5,500 4.25%

Group B
Loan 5 $2,400 6.55%
Loan 6 $2,902 6.55%
Loan 7 $2,125 6.55%

Perkins $2,000 5.0%


thanks!
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  #2  
Old 12-12-2011, 09:30 AM
littleroc littleroc is offline
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Join Date: Mar 2011
Location: Minnesota
Posts: 334
Default Re: School Loan Payment Priorities

So why not pay off the Perkins loan today? Then your down to 7 loans. When I had a ton of debt like you do, I used the Snowball method. I went from the smallest debt to the largest irregardless of the interest rate, because it has a way of keeping you motivated and you tend to see more progress quickly.
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