@Anonymous wrote:Hi all,
First time posting, like advise on which debt I should pay off first.
I have an unsecured loan at 25% APR with monthly payment of ~$600 and another unsecured loan at 7.04% with montly payment of $380
I"m debating if I should pay off the loan at 25% APR, or pay off my some of my CC.
My current credit score is around 715 and would like to increase the score.
I was thinking if I pay off the unsecure loan at 25%, that would allow me to have more money to apply towards my CC.
Not sure if thats the right decision.
Welcome to the forums!
I would suggest always paying off the highest APR item first: that's probably your 25% loan. That's the fastest way out of debt honestly, and much as you suggest, start kicking that additional money towards the credit card balances which are likely in the 15-20% range.
Score-wise paying off an installment loan isn't like paying off credit cards though, possibly no benefit or even negative, but in most non-trivial cases I would suggest that money > FICO, and this is a pretty easy example of such.
