Ask The Get Out of Debt Experts Debt Consolidation Loan

What Debt Do We Pay Off First? – Diana

“Dear Steve,

I am currently trying the debt snowball method to get out of debt. We have a debt consolidation loan that we took out 2 years ago and yes, we ran up the cards again and that is why we are in trouble. My question is, should I try to get the consolidation loan paid off first and free up the $300.00 a month we’re paying on that loan? Then we could go after the credit card debt. The interest rate on the consolidation loan is slightly less than our credit cards. I am stressing out over what I should do. I want to do whatever will get me out of debt the fastest. I have 3 credit cards that total around $13,000.00. I owe roughly $5,400.00 on the consolidation loan. I have cut up the credit cards so we won’t be tempted to use them anymore. Please advise us on what would be our best option for paying down our debt.



Dear Diana,

Mathematically speaking paying off the highest interest rate debt results in an overall plan that pays the least amount of interest.

However, many, like myself, are more motivated by paying off the smaller balances first to see direct and positive results to stay motivated.

Ultimately the choice is best made by which strategy will carry you through to the end goal, paying the debt off.

A final option to consider only if you have learned your lesson is to dump all the debt into an unsecured loan through and pay it all off at the same low rate. Just don’t run the debt up again.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

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Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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