The great payoff debate

HELP ME CLARK!
From HLN's Money Expert Clark Howard

Arnold:
We are credit card debt free. We have a mortgage, a car loan and a RV loan. We are able to make extra payments. Which would be the best one to pay down?

Clark:
Normally, the first question I'd ask you is, what are the interest rates on each of the loans? And that's how you set the priority.

Car loans normally carry a low enough interest rate for a short enough term that they're not a high priority to rush to pay off. Except this: the interest you pay on your mortgage loan is deductible on your taxes. The RV and car loans are not.

If I was looking at the three and just trying to guess, not knowing the interest rates, probably the highest-priority loan to pay off would be the RV loan. Those tend to carry the highest interest rates and have pretty hefty balances.

If your RV was financed by the manufacturer though, then you're likely better off just paying extra on your car loan.
 

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