Which auto loan should i pay off first?

I currently have 2 auto loan


1st loan- $9000 balance 9.9% interest


2nd loan- $32,000 balance 8.9% interest





i will be getting my tax refund very soon. which one should i pay first?

Which auto loan should i pay off first?
WRONG WRONG WRONG





You don't compare interest rates, you compare rate of accrual!!!





The 32k loan is accruing interest at the rate of $237.33 per month





The other loan is accruing interest at the rate of $74.25 per month





if you pay off the smaller loan the other loan is still accumulating interest at a faster rate.





Knock that 32k loan down as much as you can. if you can pay $10k on it, the next month and going forward it only accrues $163/mo in interest. $15k -%26gt; 126/mo in interest. big money difference over the life of the loan!
Reply:i would pay off the smallest one first. and if you have extra money left to pay some of the second one, i'd do that next.
Reply:The higher interest, if there aren't any pre-payment penalties.





But what are you doing with a $32,000 car loan in the first place?
Reply:The one with the highest interest, $9000 @ 9.9%.





Good luck.
Reply:9.9% first. 1. It will save you more money in interest. 2. If you can pay the 9k off quickly (assuming you can't pay the 32 off as quickly) your monthly cash availability will go up.





Edit: In an effort to give you as much information as possible, I've done the math for you:


The 9.9% loan is costing you around 74.25 per month. The 8.9% loan is costing you 237.33 per month right now. If you pay off the 9.9% loan you save 74.25 per month. If you pay 9k on the 8.9% loan your monthly cost will go down to 170.58-- a savings of 66.75. It doesn't take a rocket scientist to figure out that if someone says you can save 75 bucks or 67 bucks, you take the 75.
Reply:Always start with the smallest one and knock it off first. Then use the freed up resources to accelerate paying out the big one. That works in any kind of finance, The APR is less of a consideration.
Reply:The highest interest rate loan should be paid off first. In fact, if you are carrying credit card debt, I would pay that first, and then the car loans, starting with the $9K loan.