Questions tagged [debt-reduction]

The act of paying off debts (either partially or completely). One may do this to lower or eliminate a monthly payment and regain control of one's personal finances. There are different ways to do this, but the most popular are based either on the total amount of each debt or on the interest rate. There are different arguments as to which one is better, but either is better than doing nothing but paying the minimums.

Filter by
Sorted by
Tagged with
7 votes
3 answers
4k views

Is it a good time or good idea to invest money that I will need to repay in a year time that is not currently accumulating interest?

I'm currently in my graduate studies in Canada. I have around 20k in savings. I will make around 8k more by the end of studies in savings without accumulating any more debt. I currently have 20k in ...
user avatar
  • 243
21 votes
3 answers
6k views

Is there any downside to paying off a mortage shortly before moving?

I recently purchased a house for $125k, currently the mortgage balance is $100k, but value increased during COVID to ~$210k. I am expecting to earn a lump sum of money, enough to pay off the mortgage ...
user avatar
  • 2,327
0 votes
1 answer
156 views

What should i get first debt consolidation, house or car first? [closed]

I'm an 31yo above minimum wage worker with a little over $5k in debt from credit cards with various interests, with a credit score of 617, stocks ETFs and REITs with dividends, stable cryptocurrency ...
user avatar
2 votes
3 answers
142 views

Optimizing Savings Allocations

I am currently trying to decide the best way to allocate my savings, and I would appreciate your input. I am trying to budget roughly based on the idea of using 50% of my post tax income for ...
user avatar
0 votes
1 answer
86 views

How long does it take for a major payment to influence better terms on credit cards or personal loans?

I have ~$10K in cash "thanks" to way overpaying IRS the previous 2 years. I'm not very good at doing my own taxes, apparently. I can use it to pay off some credit card debt, which is ...
user avatar
1 vote
3 answers
114 views

Where should we invest substantial proceeds after downsizing in California?

Need to learn where to invest substantial proceeds after downsizing from a California house we bought new 21 years ago, to a smaller California house. Should I stick with mutual funds for income and ...
user avatar
  • 546
8 votes
2 answers
286 views

0% intro APRs complicating payoff plans

So I'm in not-the-best™ position with about 15K in undesirable credit card debt (And another 5K in permanent no-interest deferred payment plans). I'm trying to calculate what the optimal payoff ...
user avatar
43 votes
14 answers
10k views

Hypothetically, should I pay off the smaller + higher interest rate loan first, or the larger + higher absolute interest cost?

I have this hypothetical situation on my mind and I am not sure which is the best solution. Given: Loan 1: $340,000 at an interest rate of 1.69% per year Loan 2: $40,000 at an interest rate of 3.6% ...
user avatar
  • 441
5 votes
4 answers
1k views

How to balance paying off student loans with 401k contributions when employer matches 100%, up to federal maximum?

I've regularly heard the best advice for a young professional is to max out your employer's 401k contributions (maybe 3-5%, or limited in some way), then focus the rest on paying down debts. After the ...
user avatar
0 votes
2 answers
137 views

Which debts to target to maximize credit score change

I have a variety of debts, and I have a strategy to pay them off. It starts with getting my credit score up another 40-80 points or so to reach the threshold where I can do a cash-out refi on the ...
user avatar
2 votes
1 answer
223 views

Adjusting withholdings for high debt?

I am looking to find out if it would be a good/beneficial idea to adjust withholdings for the next year, and use the extra money to pay down credit card debt. Using rough calculators, I am estimating ...
user avatar
2 votes
2 answers
132 views

How to calculate repayments in order to pay off a personal loan by a certain date?

I have a small personal loan ($3000 remaining). The current interest is about 15% (per year???, charged monthly) but I also have to pay a monthly service fee ($10). My current weekly repayments are ...
user avatar
1 vote
1 answer
155 views

Cannot pay enough to mitigate late/overdue fees on credit card. What is the best way to handle this?

I've tried working with a credit card company over late fees/debt. I can of course make some payments, but they're always lower than the overdue fees they continuously charge. In other words I'm ...
user avatar
5 votes
3 answers
496 views

Why do companies use debt to finance business deals instead of cut the dividend?

Some time ago Altria bought a 35% stake in Juul, using $12.8 billion in cash. However if one looks at Altria's financial reports, it's clear that this is money Altria didn't have. The company didn't ...
user avatar
  • 2,594
2 votes
1 answer
349 views

How to strike balance between home loan, savings, investment, tax savings, marriage, retirement plan, startup & living life?

Small intro: I am 30 years old, living with my parents in Mumbai, India. I am the only child. During the past 8 years of working, I have managed to change my family's financial condition to a great ...
user avatar
0 votes
1 answer
166 views

What should I do with extra bonus [duplicate]

I've recently been awarded a bonus of 6500 EUR (Net), What would be the best approach for me? Here is what my financial situation roughly looks like. 6200 EUR @ 4,95% (4291,63 still open) 29 months ...
user avatar
2 votes
1 answer
111 views

USA, NY State Homeowner Post-TCA: Should I pay off mortgage or attempt to find investments?

While trying to build a model for our finances, I've managed to confuse myself reading various threads. Any advice appreciated to get me on the right track or pointed towards modelling spreadsheets. ...
user avatar
  • 57
1 vote
3 answers
266 views

Reasons to invest in 401k vs pay off loan in 1 year?

I have ~$70k across 401k and Roth IRA. I have federal student loan at $17k with 3.8%. Thus, my NW is $53k. If I choose to invest $19k into my 401k and assume the average rate of return of 7%, my 401k ...
user avatar
45 votes
11 answers
13k views

Should I take out a personal loan to pay off credit card debt?

My spouse and I have about 40K in credit card debt, in addition to a mortgage payment and student loans. We have been working hard to pay off this debt and have been moving in the right direction. ...
user avatar
1 vote
2 answers
204 views

30 yr mortg + IRA/stock market, OR 15yr mtg then 15 yrs IRA/stocks

I'm planning to refinance the mortgage given the low rates these days. Need to make a choice between a 30 yr fixed and a 15 or 20 yr fixed. Monthly household budget can accommodate any of the mortgage ...
user avatar
3 votes
5 answers
426 views

Options to repay high interest credit card debt

I have about $14,000 in high interest credit card debt. I am curious as to the best options to attack this issue. CC1 - $9,500 @ 19% CC2 - $4,100 @ 21% I have about $8k in savings I am not willing ...
user avatar
21 votes
8 answers
7k views

Strategy to pay off revolving debt while building reserve savings fund?

We currently have about $16K cash. I'd like to have $30-35K+ for a ~6 month reserve. This will be a "single giant reserve fund" that will pay for large and/or unplanned expenses, frivolities like ...
user avatar
  • 360
13 votes
9 answers
5k views

Should I increase my 401(k) contributions, or increase my mortgage payments

I have about $150k remaining to pay on my mortgage. There are 7 years left at a 3% interest rate, then after that the rate goes variable and increases to about 10%+. There's no penalty for paying the ...
user avatar
13 votes
3 answers
3k views

Is it wise to pay off mortgage with 401k?

I've been considering paying off my mortgage with my 401k balance. Some particulars, I'm in WA state in the US, and I'll turn 60 in about a week. I have enough in my 401k with my current employer to ...
user avatar
  • 585
5 votes
3 answers
926 views

Should I pay on student loans in deferment or continue to snowball other debts?

My wife and I both have steady full-time jobs that pay pretty well while also having a good amount in student loan debt. We have other debts too, like a mortgage, credit cards and a car loan. We ...
user avatar
  • 153
2 votes
1 answer
99 views

How to calculate value of paying down mortgage and removing PMI vs higher interest debts?

How do I calculate which of these is more advantageous to do with a windfall?: pay down my mortgage to the point where PMI will be removed pay off a higher interest loan Assume the amount required ...
user avatar
3 votes
2 answers
279 views

Debt Consolidation

I currently have a loan that I am paying on that has a 31k balance, with an APR of 9.24. I also have a credit card with a 6300 balance, and the APR is ~17.9%. I have an offer for a consolidation ...
user avatar
69 votes
11 answers
19k views

How can I prepare for my US student debt?

I'm a student at Drexel University. Drexel is a notoriously expensive school, and I pay roughly $35,000/yr in tuition, after awards. What's more, it is a five-year school. Currently, I'm in my fourth ...
user avatar
3 votes
2 answers
627 views

Should I pay off my 401(k) loan ASAP?

I recently saw a question on the forum about "Should I pay off my Home LOAN from my 401(k) or continue to pay Interest to myself". Most responses seemed to think that paying it off ASAP was the best ...
user avatar
3 votes
6 answers
596 views

Where should my money go first?

I have $7000 in cash. What should I pay toward first? Car Loan $17,000 @ 3.4% $532 a month payment Credit Card $3000 @ 0% interest till March 2019 Credit Card $3800 @ 0% interest till Nov 2019 Credit ...
user avatar
  • 39
4 votes
2 answers
233 views

How best to apply back Student Loan Refund?

After completing Undergrad December 2017 I began making payments on my student loans (#1-5 below), paying more than necessary on the smallest balance of my 6.8% loans (usually owe $340, paying $500). ...
user avatar
0 votes
1 answer
91 views

Deciding to pay off loans vs. invest [duplicate]

I have $23k in student loans and pay $400/mo on them. I have about $2500 left over after my bills each month. I have a 401k and am already contributing the maximum on it. Does it make sense to spend ...
user avatar
13 votes
5 answers
5k views

Incremental payoff vs lump sum

I have $12 000 in student loan debt at 6.5% interest. Currently my payments are in the ballpark of $150 per month. I have an automatic transfer to a high interest savings account with Tangerine set ...
user avatar
21 votes
4 answers
10k views

HELOC debt is 2x my mortgage, help [duplicate]

My home equity line of credit (HELOC) amount owed has now grown to where it is approximately double the amount remaining on my mortgage and the interest payments are killing me. I have no other debt. ...
user avatar
0 votes
3 answers
375 views

How to get out of short-term loans?

I have about 15 small loans ranging in between 4k-10k in local currency, with most being 4k or under. Besides this, I'm currently paying 56k in local currency for a house (I can't cancel/pause this ...
user avatar
  • 103
17 votes
8 answers
6k views

I have $3500 in Rollover IRA. Should I withdraw it early and pay off my credit card debt?

I have been investing a healthy amount in my current 401k with no plan to withdraw it early. I have $3,500 in a rollover IRA which has been sitting in there for about 4 years and I have done nothing ...
user avatar
  • 171
17 votes
8 answers
4k views

Trying to lower my credit card APR; how to know what I should ask for?

I have a B of A Cash Rewards credit card that I want to have the APR lowered. It currently hovers at 20.49%. I've been a B of A customer since 2007, I've had the credit card since 2012. From their ...
user avatar
  • 319
4 votes
3 answers
898 views

How can I get out of debt AND save money?

My wife and I are working our way out of debt; specifically, credit card (in lieu of student loans; I know this was a bad idea, don't remind me!) and personal (money loaned from her parents). Our ...
user avatar
  • 319
3 votes
6 answers
584 views

In what order should I decrease my loan debt?

I currently have federal student loans, and a personal loan I took out for college. Below are my percentages for each. I am wondering which loans I should start paying off first to ultimately not ...
user avatar
3 votes
1 answer
187 views

To Cash-Out Refi or Not?

I have a 3 option scenario and I really can't decide what's the best move here. Here's a little background on my husband and I's current situation. We are focusing on rapidly paying off our debt. We ...
user avatar
  • 31
3 votes
1 answer
346 views

Can credit card debt be negotiated?

A family member with Credit Card Debt has missed a few payments. The bank sent a letter saying that they would be willing to settle for 20% less of the current debt. Question: Can the debt be ...
user avatar
28 votes
5 answers
6k views

What method do I use to pay current expenses while paying off credit card debt?

I’m hoping you can help me with a question that seems very hard to google for some reason. I have $20K in debt on 4 cards, and I have set up a plan to pay off the deferred card on time, and the ...
user avatar
3 votes
1 answer
109 views

How exactly does a Level / Standard student loan repayment scheme work?

I have a question regarding standard (or 'level') debt repayment plans, specifically for my student loans. Hoping someone might have some insight. "Standard repayment is a level payment plan, with up ...
user avatar
-1 votes
1 answer
172 views

Multiple credit cards for one debt? [closed]

Scenario: A person owes $30,000 in school debt to a single entity. The person also has THREE credit cards. Each month, the person pays $500 using credit card 1 towards the debt and $50 (minimum fee) ...
user avatar
1 vote
2 answers
304 views

Overpaying or look to pay off mortgage

I have a mortgage that 10years fixed at 2.75%. the remaining balance is about 70k and the monthly repayments are $1135. I got it it in 2015 and I'll pay it off by 2025. I have about $45k in savings ...
user avatar
1 vote
3 answers
1k views

Why do financial planners say to pay extra to your mortgage?

I read articles all the time by financial planners who you want you pay off your mortgage early. That's all well and good but then they make suggestions such as paying extra each month on your ...
user avatar
  • 1,398
61 votes
12 answers
26k views

What should I do with $4,000 cash and High Interest Debt?

I'm receiving a $4,000 gift. I'm going to put $1,000 in an account. Next - with this gift I can pay off a credit card with a 23% APR or I can make a 15% dent in a 26% APR credit card. Do I pay off ...
user avatar
9 votes
4 answers
202 views

Credit Card Transfer/Payoff Advice

I have a credit card that is just about maxed out. I'm trying to get into financial health but the purchase interest charges are killing me and it's hard to get ahead. My cash flow is also terrible ...
user avatar
  • 91
1 vote
2 answers
543 views

Someone please help with my credit situation

I sincerely hope someone can help. My credit score is ridiculously low. It's 538. My payment history is 98%. I do have a couple collection items...but my credit has been way higher...around 660, with ...
user avatar
28 votes
5 answers
7k views

Multiple loans, multiple payers - how to snowball fairly

My brother and I both have a large sum of student loan debt. I have more than he does and my interest rates are slightly larger as well. We are both attempting to snowball our debt separately. It ...
user avatar
  • 383