I have $6000 to pay towards my loans.. which should I pay towards??

[jlg1970]

I have 5 student loans that are currently in a grace period because I just graduated college. I have $6,000 that I can pay towards my loans, and would like advice on which to pay towards. I provided the info for my loans. My PNC loan has a cosigner, and I am hoping to refinance the PNC and DISCOVER in the near future.

P= private

F= federal

	Amount	Interest rate	Amount when Payment Begins (without paying interest)	Payment Start	Minimum monthly Payment	Length of Payoff	TOTAL PAID
PNC (P) has a cosigner	13,000	12.999	16,595	11/29/17	225.32	180 m. (15 yr)	40,558
DISCOVER (P)	12,000	8.74	13,048	11/29/17	135	180 m. (15 yr)	24,300
DEPT. ED (F)	31,000	4.5	33,000	11/29/17	334	120 m. (10 yr)	40,080
PERKINS (F)	6,150	5	6,150	3/1/18	65.21	120 m. (10 yr)	7,830
JUSTUS (P)	3,600	6	3,600	6/1/18	70	60 m. (5 yr)	4,200

[Anonymous]

Definitely the PNC loan with the highest interest rate.  If you plan on refinancing ASAP to get rid of the co-signer then check and see what your interest rates are first, but I would always tackle the loan with the highest interest rate first.  I wouldn't worry about the amount of the loan nearly as much!

[Tazman81]

Normally, I would say get rid of that PNC loan just like the original contributor.  It has a very high interest rate.

One question to ask yourself though is will you have any trouble making your monthly payments for all of the loans?

So, even though getting rid of the PNC loan the fastest will save you the most money in the long run, some people also have to think about the current term.  i.e. can I afford to make my monthly payments?  If you cannot, and paying off the smaller loan first to free up monthly funds may be a better option.

Otherwise, definitely go with putting the funds toward PNC.

[Anonymous]

I never thought about it that way, but that makes sense too.  My interest rates don't vary nearly as much (4.5%-6.8%), but with the exception of my largest loan all of my small loans have the 6.8% interest rate.  I have a total of 11 loans ranging from around $1,000-$10,000.  I am planning on putting any additional money towards these smaller loans to get them paid and done with, but once those are gone I don't know where to go!  I guess I'llI just have to wait and see where I am at with the largest loan to see if it makes sense to tackle that one due to higher interest or if they other loans are significantly smaller by that point.  Oh the joys of student loans!

[smile90000]

Just want to add a few things besides what is mentioned above

1. Be careful about rushing to pay off the Federal loans (they have certain protections, such as income based plans should you find yourself unemployed in the future). 

2. Make sure you know if the private loans have a variable rate or not (many do). I've had mine for years (I'm paying them off this year) and the rate has fluctuated all over the place.

3. Once you get settled with a job, I would definitely refinance that 12.99%

[jlg1970]

Thanks everyone for the advice! I never thought about if I pay the smallest loan off first, I will have that extra $60 each month-- that's definitely something I need to take into consideraton. I do have a job starting this week, so I am not worried about not being able to afford the payments monthly. I was just so worred about accruing all the interest on the PNC loan, but I'm hoping to refinance that to a much lower APR.

[Tazman81]

It's possible for you to pay the $6000 toward the PNC loan, and then refinance that loan and still save the $60 a month.  This would get you a lower interest rate and save you monthly at the same time.

But you'd have to see if you can refinance that PNC loan first to take advantage of this option.