Yankeeslover writes “heres a questions, while we are at this...once again, im the OP... not only do I have this RV loan, I also have auto loan and a snowmobile loan..(3 years left on the snowmobile loan)... which would make more sense to try to make extra payments on? the rv is the longest term and higher interest.. would it be smart to add as much on that as possible, or try to pay off the snowmobile loan which is the lowest rate and soonest to being paid off..which would save more money in the long run? I would love to pay off snowmobile, then take that full payment that I was paying for that and apply that full payment each month to another loan...and when that's paid off, take both those payments and apply to another...”
Ouch.
That is a very hard personal call to make..
I would say that you are absolutely on the right track in wanting to pay off at least one of your loans and applying the amount you would have been paying on the old loan to one of your other outstanding loans..
For this, I stand up and applaud you, you “get it” so to speak..
Typically I would go for paying off the shortest term high interest loan first which would free up some cash quicker which then could be applied fully to the next loan or split between other long term or high interest debts..
But perhaps in this case if the snowmobile loan is the shortest term loan you have it might be good to pay it off early freeing up some cash to apply to other loans faster. But it also depends on how much you are paying monthly on that loan also and if that loan is a “open” or “closed” ended type. Only you will be able to determine what will work better in your situation.
Open ended loans you typically can pay off early and save interest.
Closed ended loans you typically can pay off the loan but you will not save interest however there are some closed ended loans which cannot be paid off early so you will need to ask and make sure..
If it is a closed ended loan and are allowed to pay off early you still might be ahead to do so if nothing else just getting rid of one payment will be helpful.
You can check with your loan companies and ask for a loan payoff balance, that number is the principle still owed as of that day and then you can run that info through a Amortization calculator to determine YOUR best route.
Additionally if you have ANY credit card debts (extremely, insanely high interest rates typically 20% up to 50% interest), you might want to think about paying them off first, then split those payments between auto, snowmobile and RV. Typically if you have credit card debts and are only making minimum payments you will never pay them off. The minimum payments are designed to only pay the interest rate (barely), often less than the interest rate (principle owed grows monthly even if you do not charge anything additional).
I would recommend that you seek REAL financial help offline, check with your local bank or accounting firm or even an tax preparer and ask if they have some recommendations for a financial adviser.
Stay clear of ANYONE pushing "debt consolidation" loans, those folks are nothing more than snake oil sellers.. Consolidation loans take all of your loans, pay them off and creates one HUGE loan payment which can not be easily paid down.. Something you don't want if you want to have any chance of shedding some of the loans you have..
Think of it like taking small steps at a time, it took a long time to get where you are and it will take time to reverse it. But IT CAN BE DONE!
