What’s the right order to pay off debt?
Most of us are carrying at least some debt. So what’s the best order to pay it off? A new survey asked average Americans what they think.
Here are five different types of debt, and how we prioritize them…
1. 40% said paying off your CREDIT CARDS should be the top priority. Which makes sense, because they usually have the highest interest rates.
2. 28% said paying your MORTGAGE should be first. You don’t want to lose your house, so that makes sense too. It only applies if you already own a home though.
3. 7% said paying off their STUDENT LOANS is #1. Those usually have a lower interest rate though, and you’ve got a long time to pay them. So it’s not the end of the world if you just have to do the minimum monthly payment for a while.
4. 4% said paying down a HOME EQUITY loan should be the top priority. Not all homeowners have those though.
5. 3% said paying off their CAR loan is the most important thing.
Another 17% of people in the survey said they’re not sure what the right order is, and the remaining 1% would choose to prioritize some other random debt.
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