Which loan to pay
Hi Terry,
My wife and I are trying to decide how to allocate a recent bonus I received. We both agree we want to use it to help pay off student loan debt. My question is which should I pay towards: I have a fixed loan at 6.55% and a higher balance variable rate loan at 6.2%. I have heard always pay the higher interest loan but the variable one is making me the most nervous.
Terry Says
Well, right now rates seem to be coming down. So that’s not an immediate worry. Is the check enough to completely wipe out one of the loans? If so, that’s the one I would pay down first. Just get rid of it! You’ll love the feeling. Perhaps you’ll love it enough to get a weekend job and use the extra money to pay down the other loan!
