I'll make this as quick as possible.
Husband and I are following Dave Ramsey Total Money Makeover. So far, have eliminated about $10k of debt. Credit card free (wahoo!)
After auto loan is paid off, we are on to student loans.
We are living very modestly, low,low, low rent. Minimal bills, etc.
Here's the fun part:
Student Loans total about $85k
I've consolidated what I can.
About half has been consolidated at 2% fixed. I'm okay with this.
One of our loans is on a variable interest that I can NOT consolidate, being that it is a private loan. It's at about 9.25% right now and on the rise.
Another loan, high-balance, is fixed at 5.25% but the payback period is 10 years (in which we have six years to go, and we had deferred it for the first two years).
Ramsey's philosophy of paying off things has worked thus far, but when it comes to my student loans vs. my auto loans, I'm up in the air. I feel I should pay off the higher balance, variable interest rate account first and then pay off the lower balance, fixed rate accounts later.
For non-Ramsey followers, he suggests ALWAYS paying off the lowest balance (regardless of interest rates) first. Also, the shorter payback loan, if I were to pay that off first it would free up ALOT of money.
I'm torn. What I've done so far has helped considerably, but everytime the interest rates goes up on one student loan (about every 3 months), my monthly payment increases too.....