I have two high interest loans I want to tackle with $3,000. I'm not sure if splitting them in specific ratios is best or just dump it all on Loan 1. Thank you so much!!!
| Loan | Balance | Interest |
|---|---|---|
| 1- subsidized | $3751.60 | 4.80% |
| 2- subsidized | $3912.17 | 4.28% |
A little advice on allocation!
byu/gl00mygoat inStudentLoans
Posted by gl00mygoat
2 Comments
By most measures, debt at less than 5% is not at all “high” interest. You should at least *consider* placing other financial priorities higher before you pay these off.
Your debt payoff strategy should be just one element of your broader financial plan. The money management advice in the [prime directive](https://www.reddit.com/r/personalfinance/wiki/commontopics) from the r/personalfinance wiki is a good place to start. (There is also a [flow chart version](https://i.imgur.com/lSoUQr2.png)).
If you do decide to put all $3K against your student loans, first make sure you’ve satisfied the minimum due on both, then put all of the extra money against Loan 1.
Hi friend. Personally, I would dump it on the highest interest loan. Knock that one out and work on the 4.28%