Timeline for Do I pay a zero % loan before another to clear both loans faster?
Current License: CC BY-SA 3.0
5 events
| when toggle format | what | by | license | comment | |
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| Apr 29, 2016 at 10:57 | comment | added | JTP - Apologise to Monica♦ | Brad - sorry, the linked article is useless. It begins with data from a debt settlement company. That's not a sample population. Unfortunately, the final full article is pay-walled and $20 for the single article. To be clear, I'd concede that "In their analysis, Gal and McShane found that consumers who pursued the 'small victories' strategy were more likely to eliminate their entire debt balance." I just find the article itself lacking in compelling information. | |
| Apr 28, 2016 at 13:22 | comment | added | Brad Werth | This is backed by research - kellogg.northwestern.edu/news_articles/2012/…. | |
| Apr 27, 2016 at 20:48 | comment | added | Itsme2003 | Joe, you missed the point. You don't pay it off early so you can say you paid it off. You pay it off early to help maintain motivation toward the goal of getting out of debt. When the smaller debt is paid off you feel as though you have accomplished something toward getting out of debt. If you pay off the smaller debt first you pay $50 more of interest payments, but if you lose motivation toward getting out of debt, you might slow down the process and end up paying much more than $50 in interest because you didn't remain motivated. Everyone knows the math. Few understand the psychology. | |
| Apr 27, 2016 at 13:22 | comment | added | Joe Strazzere | "The Debt Snowball is more effective however, because it works better for people." - for some people. (I would never hurry to pay off a 0% interest loan, no matter how small, just so that I could say "I paid off a debt",) | |
| Apr 27, 2016 at 3:49 | history | answered | tomjedrz | CC BY-SA 3.0 |