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Which loans to tackle first? Auto or student loan?


Which loans to tackle first? Auto or student loan?

I am on my road to rebuilding after chapter 7.

I also have about 40k in student loans currently in deferment due to borrowers defense claim. Long story. For profit school that went BK shortly after, I was left with a Associates nobody would take seriously even thou I worked my a** off to get my degree. I was young and did not quite understand how the education system worked at that time. Anyways.

My current employer offers student loan reimbursement for most of my expenses so I decided to go back to school and try to turn some of the credits from my previous loans into a degree I can actually use. Currently in school pursuing my Bachelors. I pay a flat fee per semestre regardless of how many classes I take, so I have been taking as many as I can handle to be done ASAP with the least amount of debt possible. 

After my BK I have been able to save about 6 months of living expenses as emergency fund.

I am trying to figure out which loan I should tackle next.

Auto loan 5.8% APR with about 23.5k left. Always pay earlier than due date to pay the least on interest as I can 

Student loans 

About 40k in defferment waiting on DoE to say if we qualify for any forgiveness

2 Small loans of 4.5k at 5.7% and 4.7k at 2.7%. Because I am in school, no payment needed. 

I really would like to buy a home in about 2 years, as soon as I am able given my BK (if the market has not gone haywire by then)

Now, after paying all my obligations, I have about $200 I can easily throw at some of these loans. 

Should I tackle my car loan first since it is the highest APR and SL are not accruing interest at this time?

Or should I start tackling the smaller SL first?

Or, should I keep growing my savings in order to prep for home ownership? 


TIA for any insight or advice. 

Message 1 of 3
Established Contributor

Re: Which loans to tackle first? Auto or student loan?

I would recommend paying off your car then you could concentrat on saving for your down payment.... You can continue waiting to see how your complaint is goint to play out and if you get any relief great and if not when it comes time to enter into a repayment plan put them on an income driven plan. (assuming none are private) 

Message 2 of 3
Super Contributor

Re: Which loans to tackle first? Auto or student loan?

I would probably throw it at the auto loan.  Partly because of the nebulous status of your SLs and because the APR is higher on the auto loan.

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Message 3 of 3
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