N2EY wrote:

In article , Mike Coslo
writes:

some snippage

If you look at the total dollars spent, you can still pay less money on
some of the higher interest lower cost loans than lower interest higher
priced loans. (although I'd never suggest doing that) It's just the
sheer amount of dollars.


Yep. That's why you have to calculate the options.


So the best bet is to pay all the loans off as
quickly as possible.


Not always.

Suppose you're in a situation where money is tight but you can expect big
increases some time in the future. (example: kids are small and one parent is
home with them, but when the youngest reaches school age both parents will be
working full time). In a case like that, having a lower monthly payment may be
the best alternative even if it requires a longer loan term.

Well, a qualified yes. I've found people, including myself, sometimes
too optimistic when dealing with "future" things, like earnings and
expenditures. While what you sat is true, I'll take the tack of either
paying the thing off ASAP, or go without. Maybe even save for what I
want. (Modern Heresy Alert!)


Best way to not be a fool is to not go heavily into debt in the first
place. I have a 5 percent loan, but I'll pay it off quickly, I think.

I wouldn't but thats me. What I would do is see if you can refinance at

all

to a lower rate. I have actually seen a interest rate recently somewhere

in

the 3 percent range!! Talk about a cheap loan, hell, I would
refinance/remortgage my neighbors house if I could legally get away with

it!

LOL


Sure - because a house is something you need anyway, it's insured and not
likely to wind up obsolete or useless in a few years. Most of all, almost

no

one can afford to buy a house for cash.



Instead of paying off that low interest loan quickly, one is smarter
paying
off the higher interest loans like automobiles, department and credit
card
charges, and other loans/debts.

Again, it's better to not get into a situation where you would have to
choose which loan you're paying off early.

Well, its not paying the principle that kills ya, its the interest that

does

over a long time. The lesser the interest rate, the less I am interested

in

rushing to pay it off extra early. Either way, one needs to do the math

or

find someone who does understand real estate finance and other financal
calculations to make sure in their own individual circumstances.


Exactly - it's all in the numbers for your particular situation.

The biggest financial boo-boos people make a

- confusing "wants" and "needs" (you may need a car, but you want a new

SUV)

- not having a budget, or not having one based on real data
- looking at their income out-of-context and saying "I can afford X"

without

doing the numbers.

Don't forget succumbing to the credit card problem. It's soooo easy to


live life large when you have 10 credit cards with a 20 thousand liimit
on each card.


That's simply another version of looking at their income out-of-context and
saying "I can afford X" without doing the numbers. If you can't afford to pay
off the credit cards at the end of the month, you really can't afford the
purchase made on them.

I consider credit cards as "payment cards", nothing more.

One of those nifty little life secrets I've found out is that if you
are willing to avoid spending credit money like a drunken sailor while
you are young, you will have much more money for your toys when you get
older.


New verse to an old song:

What shall we do with a drunken sailor
What shall we do with a drunken sailor
What shall we do with a drunken sailor
Ear-lie in the morning?

Put 'im in charge of an Exxon tanker
Put 'im in charge of an Exxon tanker
Put 'im in charge of an Exxon tanker
Ear-lie in the morning!


HeHe!

- Mike KB3EIA -