I love that site! You can see it both ways...paying the lowest first and paying the highest interest first and it will give you the difference you save if you payyhr interest first. A piece of advice though...if you are planning to "save" your snowball on the site...Sign up with a user name first (you can save your snowball and track your progress if you sign up (it's free). I had all my info in and then wanted to save it and create an account I clicked on create and had to start all over, so create your account 1st then save it

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I agree with what the others have said: it makes more sense mathematically to attack the 7.9% compound interest loan (hate that compound interest) after the 12% one than the very low 4% (which I assume is simple interest?). BUT, it might make more psychological sense for you to do it the other way.

What we did in a similar case was I just combined the sum of all the debts and thought about it as a total and kept track of our progress as a total. That made it seem enormous (and it was!), but it also let me see how fast it was descending as a total with the minimum sums going to the lower, smaller interest loans and everything we could at the big higher interest loan. So we did it the mathematical way, but that was our psychological motivation. It's what works for you, though, as everyone says.

One thing: I know Citi has been offering 4.9% "fixed forever" rates on balance transfers with no balance transfer fees. You might be able to find similar or better with some other companies. You look as if you have good rates and so probably good credit. You should see if you could do something like that with that 7.9%. Then you could lock it into a rate that's not much higher than the low one you want to pay off first, so you could have the best of both worlds! And saving 3%/year on a large sum is a lot to save.

I'll be the dissenter here...money is not (or should not be) psychological...rather it is very logical...you should attack your problem mathematically. I don't have any debt (aside from my mortgage), but if I did, it would be the highest interest rate first...period...all that "good feeling" psyche stuff is what gets you into trouble in the first place. If you need to feel good about paying something off, make a list with the monthly interest rates listed, and check off the ones you save.

I have always paid the smallest debt amount off first -- so I can see that I am making progress!

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Thank you for the link! That is an excellent website.

I too pay off the smallest debt to the highest. I tried it the other way and it seemed I was just spinning my wheels and not really getting anywhere. Now when I pay off a small one and close it I feel the sense of accomplishment that I am doing the right thing and it fuels me to go further. We have been doing the Dave Ramsey debt reduction.

Jane

What I have done is create a spreadsheet and listed all the debts and associated interest rates. Then I apply the most to the debt that costs me the most each month -- the highest interest rate. I have seen my total debt fall every month for the past two months (since I started) and I have been very pleased at my overall progress.

The debt is a total of multiple pieces --my goal is to pay it off the smartest and fastest.

Also I did pay off a few smaller debts just to stop the mail flow into my house each month. I wanted the annoying debts to stop. (I owed for a kids book and a medical visit and I was going to challenge both as genuine but never got around to it. Easier to just pay it!!)

Good luck.

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Grace

Wife to Stoney

Mommy of Sarah (8.5), Hannah (7), and John(5)