Which debt to payoff first.
Do you find yourself consumed in a mountain of debt considering a debt consolidation loan and struggling to decide which bill to pay off first? Is it the department store card with a 24.99% interest rate? Or maybe it’s your car loan that you financed for 72 months? Or should you double up on your mortgage and become a home owner sooner? When it comes to paying off debt, many have their opinions to where the pecking order should be begin. Dave Ramsey, author of Total Money Makeover, recommends the Debt Snowball approach. This method suggests you make a list of all your debts, smallest to largest while disregarding interest rates, and paying off the smallest to largest to help you achieve satisfaction as you mark off the paid balances. Suze Orman has a different approach. Catching another of Suze’s episodes, she shared her Loyalty List of Paying Off Debt. Suze shares which debts you should pay off sooner rather than later. When you don’t have a lot of extra cash to spread around, this might help with your decision.
First, a disclaimer. I do not endorse Suze Orman. Sometimes her advice is downright scary. But I thought this was a decent approach on helping individuals struggling with debt to sort through the mess.
6 Kinds of Debt According to Suze Orman
Suze first breaks down the six kinds of debt that that all people have:
- IRS Debt
- Student Loan Debt
- Personal Loan Debt
- Mortgage Debt
- Car Loan Debt
- Credit Card Debt
Any of these sound familiar? Probably more than you want to admit.
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