Debt reduction Input Request

[FREEDOMSEEK3R]

I have sat down and listed out my debt that I pay interest on.

I would like to reduce the amount of interest I pay and am open

to any suggestions of things I haven't thought about. This months

interest on my outstanding debt have cost me $75.

 

My debts:

 

Installment Loan: 14.9% Bal $3200 Payment $171 21 months remaining

Installment Loan: 20% Bal $1500 Payment $55 36 months remaining

Credit Card: 16.9% Bal $383 Payment $20

Past Due w/Payment Arrangements + interest: 6% Bal $1000 Payment $80 13 months remaining

 

Some factors I am using to determine how much to pay and to whom:

 

I have $0 Emergency Fund.

PIF CC could act as EF if needed.

I have $200-300 income/month not allocated to current bills.

When the $3200 IL is PIF I can reduce insurance coverage on my car.

CC balance = 76% util

As each debt is paid off I can roll the funds to the next.

 

 

Given the above things that I have thought of, I am finding it hard to choose

the best direction to head in. Without an EF or CC to fall back on incase of

an emergency I am screwed. In my current position I don't foresee anything

that would come up that costs more than $500 so I figured I should pay the

CC off first.

 

Any ideas from you guys would be great, i love learning from this place.

 

Gary

[squirrelgirl]

First thing that comes to mind is REFINANCE.

 

Second thing that comes to mind - we're talking LESS than 5K here... can you borrow money from a family member at a fixed interest rate of maybe 5-10%? Or 0% if you are really lucky

 

Just pay as much as possible - Highest interest to lowest...

[radi8]

Dilemma for me is whether to wipe out the car note so the insurance premium drops, or go after one of the higher rate loans first.

How much will you save (monthly) once you can reduce the insurance?

[54regcab]

I'd kill the CC first just to get rid of it, then the installment loans highest rate to lowest.

[FREEDOMSEEK3R]

First thing that comes to mind is REFINANCE.

 

Second thing that comes to mind - we're talking LESS than 5K here... can you borrow money from a family member at a fixed interest rate of maybe 5-10%? Or 0% if you are really lucky

 

Just pay as much as possible - Highest interest to lowest...

 

With my current scores refinancing isn't an option.

 

Family loans are out of the question.

 

Thanks for the ideas.

[FREEDOMSEEK3R]

Dilemma for me is whether to wipe out the car note so the insurance premium drops, or go after one of the higher rate loans first.

How much will you save (monthly) once you can reduce the insurance?

 

Savings from insurance about $150 per year.

[FREEDOMSEEK3R]

I'd kill the CC first just to get rid of it, then the installment loans highest rate to lowest.

 

I'm thinking this may be the best approach.

[Easy Rhino]

Okay, so the car loan requires and extra $150 a year in insurance. That's kind of like an effective 19.5% rate the first year. But not exactly, because you could theoretically get some use out of the insurance in case of an accident, right?

 

The 20% loan is costing you $150 per six months.

 

I say throw a hundred bucks into savings, pay the credit card enough to keep it "useable", and work on getting that 20% loan knocked out.

[FREEDOMSEEK3R]

Okay, so the car loan requires and extra $150 a year in insurance. That's kind of like an effective 19.5% rate the first year. But not exactly, because you could theoretically get some use out of the insurance in case of an accident, right?

 

The 20% loan is costing you $150 per six months.

 

I say throw a hundred bucks into savings, pay the credit card enough to keep it "useable", and work on getting that 20% loan knocked out.

 

I was leaning heavily toward paying the 20% loan. Now that you point out the savings

over the car insurance it seems more appealing. I seem to have a built in aversion to

savings while I am still paying off debt. I know I need some sort of EF but hate the fact

that future $$ spent with credit is costing me $75 a month or so. I'd also be in a heap

of trouble with a minor car repair like a tire so it makes sense to pay the credit card

down to a usable level first even if I decided not to go with the $100 in savings.

 

Thanks for the advice.

[FREEDOMSEEK3R]

I forgot to mention that the car insurance is costing me $40 a year more

because I have been paying in installments rather than 6 months at a time.

That makes it 6% higher.