As it stands right now the interest rates are:
- CC2 - 11.99%
- CC3 - 14.24% (but the current balance was a balance transfer offer of 1.99% through January '13)
- CC4 - 9.24% (but over half of the current balance is at 5.99% from a balance transfer offer)
- Lending Club - 7.88%
I would really like to get as much of this revolving credit down to as low of an interest rate as possible. The place that has the lowest rate....our retirement account. Once the current loan is paid off, we can dip into it again in 60 days. The rate? 1.75%. Of course any money we would withdraw would not be earning interest for our retirement. We would have to be sure that the overall benefit would be worth it.
The reason we are considering this is that G-man isn't even eligible to retire for 19 more years. Once the debt is paid off completely, we plan on aggressively saving for retirement. And if we can get the debt paid off within 4 more years, that would still give us 15 years to really save and invest.
I have kicked around a few thoughts.
- We can take out $6500 for a 24 month term and pay off Lending Club. If we increase the minimum payment so that it is paid off at the same time Lending Club would have been paid off....it is a net savings of roughly $40 a month for 17 months, or a total savings of $680. That $40 savings would go towards another CC.
- We can take $10,000 out over 3 years, which would be $130 a paycheck, and pretty much wipe out CC2 for the same amount we are paying per month now.
Another idea we had was another Lending Club loan. More interest, but doesn't effect our retirement.
We aren't going to do anything now...it would be April the earliest that we would do ANYTHING. We have to wait for 2012 to settle....wait for the current retirement loan to be paid off for at least 60 days.....so nothing anytime soon. I just really want to find the right avenue to make progress!!
We do well with the "set it and forget it" stuff. We set up payment plans, and just let them do their thing. Lending Club has been fabulous for that. We got the loan....we put money aside each paycheck...and once a month they debit our account. Once the January payment posts, we will be almost half way paid off!
G-man's car was the same way. We had money direct deposited into the account, and it was debited once a month.
I am trying to do the same thing with the rest of our debt. Just trying to get it to the lowest interest rate possible! Any thoughts???? Right now we have $1105 in the budget that is designated for CC payments (minimums + $150 extra). This is JUST for the CC and current Lending Club loan. Not the car, student loans, or medical.