In What Order Should You Pay Back Loans?: Or, When Do I Pay Back My Car?
If youre like most Americans, you have quite a few bills to pay. A car loan, credit cards, maybe even a mortgage. If you have extra cash, when you should pay it back?
Credit Cards First
If you have a lot of loans, the first rule of thumb is to pay back the higher interest loan first. This means that first of all, you should never get a payday loan or cash advance on your paycheck. These loans can lead to exorbitant rates of interest, and should always be repaid first.
However, for many people, the highest-interest debt that they owe is a credit card debt. This should be paid back before you put any extra money on your car payments, student debt, or mortgage. Although many people carry a balance on their credit cards, the best thing to do is to avoid carrying a balance, or to pay as much as you can each month. This will reduce the amount of money that you are spending each month on just giving the credit card companies money.
Car Loans, Personal Loans, Renovation Loans, Student Loans
Once you have paid off your credit card debt, what do you with extra money now?...
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