At the beginning of the month, this was our debt load:
Credit Cards (11.5% interest as of June 16)- $3,135
Money owed to parents (0% interest)- $8,830
Car loan (10% interest)- $14,178
Student loans (6-10% interest) $57,066
Grand total: $83,209
Our debt snowball plan is to hit these loans from the smallest to the largest, eliminating them one at a time. We are currently putting $950 extra towards the debt each month and making minimum payments on the rest. Currently, we will be debt free by May 2010 if we maintain this schedule.
A few posts ago I mentioned that getting a consolidation loan would accelerate our payment plan (we would be debt free one full year earlier), but that the bank would not consider my self employment income as income. Since then I have had some good suggestions, and read other blogs about this issue. The advice appears to be to start shopping around! My only hesitation is that I don't want to appear to be getting turned down multiple times for a loan (on my credit report for example).
It is interesting to note that I tried to play around with our debt snowball plan as is (no consolidation) and arranging the loans in order of interest rates (high to low) to see if this helped us pay things off earlier. It helped a bit, but we are constrained by having to pay my parents off in the next year (the interest free loan was for 2 years only).
