Repaying Debt: What’s the Fastest Way?

Running the Numbers

I decided to use Money’s Debt Planner tool to see how long it would take to pay off two debts:

• My car loan has a balance of $ 6250 and has an interest rate of 13.75%.
• Medical bills that were supposed to be covered by insurance (long story) but now are $350 with a 20% interest rate.

I looked at all three of their options: pay by a certain date, pay a set amount per month, and pay the minimum balances.

How Quickly Can You Pay off Your Credit Card Debt?

Here are the results I got for paying it off in 2 years:

Here are the results of the $350/month plan:

Finally, here are the results if I only pay the minimum balances:

Just looking at that I realize that I have got to be more aggressive about paying these off as soon as possible. Try using that calculator and notice the huge difference between the payment plans for yourself.

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