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    cadger's Avatar
    cadger Posts: 1, Reputation: 1
    New Member
     
    #1

    Oct 22, 2012, 07:18 AM
    Free Questions and Answers on Accounting
    I have 2 outstanding credit balances:

    1. 84 K at 8.99%


    And 2. 30 K at 15.99%

    I got a 10000 bonus.

    What's the smart move? Pay down 1, or pay down 2?
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
    Ultra Member
     
    #2

    Oct 22, 2012, 08:31 AM
    I would pay down the one with the highest interest rate first, because with a lower principal amount due you will save more interest amount than with the other loan.

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