Jasmine
VIP Contributor
Let’s say you have a home loan, car loan, student loan, and credit card loan. So, how do you start paying loan when you have limited income?
So, first of all you need to make a list of loan from highest to the lowest. For example, your home loan might stand highest and your credit card loan might rank lowest.
What you need to do is you pay minimum due for all loans except your lowest loan which is credit card in this case.
Once you have paid off your credit card loan, you can use the money you used to pay credit card to pay your another lowest loan which could be student loan, or a car loan.
Paying off your credit car loan first makes sense because once you pay your entire loan, you can start using it again and get a new interest free payment term for 30-45 days. By using this method, you can become debt free.
So, first of all you need to make a list of loan from highest to the lowest. For example, your home loan might stand highest and your credit card loan might rank lowest.
What you need to do is you pay minimum due for all loans except your lowest loan which is credit card in this case.
Once you have paid off your credit card loan, you can use the money you used to pay credit card to pay your another lowest loan which could be student loan, or a car loan.
Paying off your credit car loan first makes sense because once you pay your entire loan, you can start using it again and get a new interest free payment term for 30-45 days. By using this method, you can become debt free.