4 ms·
Not necessarily. Counter example - if highest interest loan has outstanding balance of $100,000, car loan $5,000, credit card $1,000 and you owe to your friend
by ivanche 6y ago
Not necessarily. Counter example - if highest interest loan has outstanding balance of $100,000, car loan $5,000, credit card $1,000 and you owe to your friend $500.
- frobozz 6y agoCan you explain your counterexample? Perhaps with with some rates? I don't understand it. I can't see how it is would be financially beneficial to accelerate the payment of the smaller/cheaper loans over the biggest/costliest one. I'll concede that paying back your friend sooner than they expect might have a goodwill benefit, but not a monetary one. Even then, I'm not sure how much, over just giving it to them when they asked.
- phroobster 6y agoIt’s not financially beneficial. The poster you replied to has no idea what he’s talking about. Repaying the highest interest loan first will still be the best choice.
- canadianfella 6y agoWhat is your point?