There are a lot of different things you’ll read when it comes to your money. The personal finance world has lots of people with many opinions. I’m one of them! But with so much out there, it can often get confusing. What do you believe? What’s true and what’s a suggestion? I don’t have all the answers. But there are a few money myths that I’ve seen come up more than a few times.
#1: Always Pay The Higher Interest Loan First
The higher the interest rate means that less of your payment goes to your principal. This is true. So, you should always pay the highest interest loan first, right?
I think you have some flexibility here. If you have a loan with a low balance, maybe consider paying that off first. It will free up some cash flow. Plus, paying off a loan will give you a ‘win’ on your scorecard. Those can be very important and might be worth a few bucks in higher interest in the short term.