Which loans to pay off first

[SMikulski49]

Here is it guys

Student Loans:

1.  original loan was 8,633.33 the balance is 8,132.16. The monthly payment is 50, interest is 3.00% and the expected pay off day is 6/2/28
2. original loan was 15,625.00 the balance is 14,385.20. The monthly payment is 93, interest is 3.00% and the expected pay off day is 6/2/28
3. original loan was 5,500.00 the balance is 3,926.97. The monthly payment is 65, interest is 2.22% and the expected pay off day is 6/2/18
4. original loan was 3,500.00 the balance is 2,498.88. The monthly payment is 42, interest is 2.22% and the expected pay off day is 6/2/18
5. original loan was 2,625.00 the balance is 1,874.00. The monthly payment is 65, interest is 2.22% and the expected pay off day is 6/2/18

Car loan:

1. original loan was 18,374.08 the balance is 7,367.69. The monthly payment is 322.07, interest is 7.99% and the expected pay off day is 1/15/2014 although I have been paying more then the minimum and I am a year a head. 

I have 18,000 in savings, I do not pay for rent or mortgage as I live with my parents. 

How much of my savings should I save, how much should I use to pay the above loans and which loans should I pay off first.

Also how will paying off any loans effect my credit score? should I leave some loans with low balance just so its reporting something? How long will the paid off student loans and car loan stay on my report if I pay them off? Will it hurt my credit or help my credit paying off some loans?  

Thanks for all the help in advance

[Travis-84]

Pay off the car loan first, since the interest is the highest. 

As for how much you should keep in savings, that is a personal preference.  Do you expect any major spending anytime soon (deposit on a mortgage, etc).

If so, you might want to keep more money in your account.  If it was me, I would pay the car loan off immediately.   I see no reason to pay 8% interest if you have the money. 

As for what to do with the remaining money, Its personal preference.  But if you are going to pay off a loan, I would tackle the loans with the highest interest.

Paying off your loans will help your score, but it won't be a huge jump.  It depends on many many factors.  When you pay off your loans, they will remain on your credit report for 10 years.  Getting out of debt is the most important thing, so I would not purposely leave any loans on your report (but at 2% interest, I would keep some money in savings)

[IOBA]

I agree - pay off your car loan first.

Then I would list your student loans in order, from the smallest balance to the highest balance.   Pay off the first one in full.  Then keep working your way through your list.  Be sure to call the lender and ask for the 5-10 day payoff balance.

As for savings - personal choice.  Are you working?  Are you able to stay with your parents for another year or so?

I personally, do not like debt, so I would be inclined to stay put and work hard to get all the debt paid off.

As for when it falls off - that varies.  I still have stuff that closed in 1995 still showing on my credit report.  I'm not going to rock the boat on that one cuz it helps my overall score.   But in general, the rules state that it should report for at least 7 years after the date it closed.   In the meantime, it shows you paid your debt off early and are a good credit risk.  Wouldn't worry about it falling off now anyways...you will probably do  more things in the next few years that will add to your credit profile.  

[Tazman81]

+1 -- pay your carloan off first.

Are any of your student loans subsidized where the government is paying the interest?  If so, then I would start paying more on the unsubsidized loans and just keep the smaller payments to the subsidized ones.

[SMikulski49]

Thanks for all your input, this week I will pay off the car loan and I will start paying off my student loans one by one.

[SMikulski49]

Hey guys, 

Just wanted to update you on my loan status.  I was able to pay off the first two loans, the two biggest ones, and my car loan. I was able to pay off the car loan and the first student loan (the one that was over 8,000) and my parents helped me out and borrowed me 14+K for the other loan so i would not waste my money on interest. I noticed that in the first two biggest loans, all of the money was going towards interest and only few cents to the actual loan thats why i decided to get rid of them first. The other 3 smaller loans most of the money is going to the actual loan and only few dollars towards interest so i decided to keep them for now. 

I am hoping to be all paid off with the remaining loans this year and pay my parents off as soon as i can. Feels good to have extra 500 each month

thanks for all of your help guys.

[Tazman81]

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@SMikulski49 wrote:

Hey guys, 

Just wanted to update you on my loan status.  I was able to pay off the first two loans, the two biggest ones, and my car loan. I was able to pay off the car loan and the first student loan (the one that was over 8,000) and my parents helped me out and borrowed me 14+K for the other loan so i would not waste my money on interest. I noticed that in the first two biggest loans, all of the money was going towards interest and only few cents to the actual loan thats why i decided to get rid of them first. The other 3 smaller loans most of the money is going to the actual loan and only few dollars towards interest so i decided to keep them for now. 

I am hoping to be all paid off with the remaining loans this year and pay my parents off as soon as i can. Feels good to have extra 500 each month

thanks for all of your help guys.

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Now make sure to put that extra money toward your other loans so that you can get the paid off.  Then you will truly have "extra" money each month.