Loan Payment Plan

[nsinke]

I have several loans that I want to pay off in order of smallest to largest. When the smallest is paid off I want to take that payment and add it to the next one and so on. I figured out the end date of the first loan and I want a formula that would make normal payments until the first one is paid off. I cannot seem to figure it out.

Thanks for the help

Nate

 

[gardnertoo]

That particular wheel has been invented, no need to do it again. This website has a basic example. I would do things differently if I were starting from scratch, but the principles are sound. For example, because he does months by column and debts by row, this one only goes out about 20 years. A 30 year mortgage might not get paid off by the end of the sheet if you're not putting enough extra into it. And graphs, where are the graphs?? Nevertheless it's a good start. Save yourself the trouble and download his example, which you can then pick apart and see how he did it.

 

[mortgageman]

That particular wheel has been invented, no need to do it again. This website has a basic example. I would do things differently if I were starting from scratch, but the principles are sound. For example, because he does months by column and debts by row, this one only goes out about 20 years. A 30 year mortgage might not get paid off by the end of the sheet if you're not putting enough extra into it. And graphs, where are the graphs?? Nevertheless it's a good start. Save yourself the trouble and download his example, which you can then pick apart and see how he did it.

It is worth pointing out that paying off loans in order of increasing BALANCE, is NOT way to save the most money. You should pay off in decreasing size of rate.

Gene Klein

 

[gardnertoo]

What would a user named Mortgageman know about loans?? LOL

Of course you're right. The math dictates a payoff schedule in order of reducing interest. However, there is a psychological effect in reducing the number of debts, especially if you have a large number of them. I think Dave Ramsey advocates going for the morale boost when you are first beginning a determined plan for debt reduction, at least until the "live frugal and pay down debt" habit has fully formed.