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URL:  http://boards.fool.com/you-arent-following-or-im-not-being-clear-31089807.aspx

Subject:  Re: The Plan Date:  1/28/2014  6:31 PM
Author:  aj485 Number:  307752 of 308782

You aren't following or I'm not being clear (probably the later). I'm not comfortable disclosing my income to you, Mr. Stranger on the Internets, but it's enough.
The only way for you to understand, I guess, would be if you saw my projected budget spreadsheets, and I'm definitely not comfortable with that

It's all going to work out. My math is fine.


That would be Ms. Stranger... ;-)

I just didn't see that the numbers added up the way that they were being described, but if you're comfortable with the figures, that's what's important.

Based on what I understand from your description of the interest rate and timeframe, I do want to provide a couple of different interest cost scenarios. The assumptions may not actually fit your scenario, but I wanted to show you the difference it can make in the interest paid by choosing which loan to pay off first.

Assumptions:

CC 1: $10k at 7.9% interest with a $100/month minimum payment
Loan 1: $10k at 12% interest with a $200/month minimum payment

Monthly amount available for debt payoff:
Feb 14 - May 14 $1500
Jun 14 - Jul 14 $1000
Aug 14 - Sep 14 $1500
Oct 14 and on $500

Scenario 1 - pay $200/month minimum on Loan 1 until CC 1 paid off

- CC 1 paid off in Jan, 2015; interest cost is $325
- Loan 1 paid off in Aug, 2016; interest cost is $1986
- Total interest paid is $2311

Scenario 2 - pay $100/month minimum on CC 1 until Loan 1 paid off

- CC 1 paid off in Jul, 2016; interest cost is $1273
- Loan 1 paid off in Oct, 2013; interest cost is $456
- Total interest paid is $1729

Scenario 2 saves $582 in interest compared to Scenario 1.

AJ
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