2

I have 3 private student loans.

Outstanding Principal Balance taken 08/2011 $15,000.00
Outstanding Accrued Interest as of 08/21/15 $6,678.26
Interest Rate 11.75%

Outstanding Principal Balance taken out 08/2012 $11,300.00
Outstanding Accrued Interest as of 08/21/15 $3,546.16
Interest Rate 11.45%

Outstanding Principal Balance taken out 08/2013 $6,000.00
Outstanding Accrued Interest as of 08/21/15 $1,186.02
Interest Rate 10.99%

Which loan should I start paying back first?

  • 2
    Highest interest rate first. – Pete Becker Aug 22 '15 at 23:48
  • How long are you planning on it taking you to pay all of them off? – Ben Miller Aug 23 '15 at 2:32
  • Good gravy! Why so high interest on student loan debt? – Patches Aug 25 '15 at 16:05
5

Strictly from paying overall less interest and paying off faster, you should pay the one with higher interest rate first.

However depending on individual, it makes more easier for someone to see the number of loans going down, in such cases it makes sense to get rid of a loan with lowest amount and gain that psychological advantage.

Related question
Why would anyone want to pay off their debts in a way other than "highest interest" first?

Is it better to pay off a loan with a higher interest rate or one with a much higher principal balance?

I've often heard of the "snowball" method for paying off credit card debt. How does it work?

  • 3
    And in this example, where the interest rates really aren't much different, that psychological advantage can easily outweigh the strictly financial guideline of highest interest first. – Pete Becker Aug 23 '15 at 14:39

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