Numbers make my brain go Wugga Wugga
April 22, 2010 12:06 PM Subscribe
[Money Filter] Help me pay off this loan wisely.
posted by trixare4kids to Work & Money (10 answers total) 2 users marked this as a favorite
DISCLAIMER: I've been through a bunch of Ask MeFi questions and I see that dinkytown.com is recommended a lot, but I didn't seem to find anything or any calculator that would answer my question. Or maybe I'm not asking the right question? Also I'm seriously retarded when it comes to math and numbers and I'm fine with that -- I have other talents.
Whew, that said, here's my question:
I have a a new signature line of credit through my credit union that I used to do some work on my house.
The interest is calculated daily. When I make a payment, it pays the interest due up to that date and then applies the rest to the principal. So no matter how many payments per month I make, they take X amount for accumulated daily interest each time. I cannot pay the amount due and then a week later make another payment and say, "apply this amount to principal." I'm sure this is called something, I just don't know what.
The payment due is $118 per month, due on the 25th of each month. My current plan is to set up online banking to automatically pay $125 every other Friday (payday), which is what I can comfortably afford. It occurs to me that this may not be the wisest way to pay it off. Of course I want to pay down the principal as soon as possible.
With that in mind do I:
1. Wait and pay the entire $250 on the due date?
2. Keep paying $125 every other Friday (PayDay)
3. Pay $62.50 every Friday?
4. It just doesn't matter?
5. or something else I'm not thinking of..?
Thanks, you wonderful AskMefiers, you.