Scenario 2
Enough to pay the minimal balance and a little left over
If this is the situation you are in, you are in a far more powerful situation than most people in similar situations. Not only will you be able to pay off your unwanted debt faster than most people, you are already in a position to prepare your springboard and switching from bad debt to good debt.
Go back to your reports and records and figure out which bills are going to be charging the largest amount of interest. In the long run, these are the bills which will cause you even more debt without really ever getting any benefit at all and a much greater loss than the other debts you have in front of you.
Depending on the amount of discretionary disposable income allotted in your budget, you may be able to pay off additional amounts on more than one bill. Making this decision depends on whether you have enough to pay off a significant amount of the principal amount of the loan or not. If you only have enough to pay a noticeable amount on the base amount, or the actual amount which is accruing interest, than you should only pay additional funds on this one account.
If you do have enough to be able to pay off a substantial portion of the principal amount on more than one of the bills and still pay the minimal balance on the other bills you have, than divide the additional cash among these bills and decrease your interest payments at the same time.
This will allow you to pay a lot less money out in terms of interest over the long run. While those few pennies you save on the bills for the next month may or may not add up to anything of real value for now; over the course of the payments and over time, they will add up to a great increase in personal wealth and a lot less money paid out in interest alone.
If you are going to be paying off all of these bills, that will be difficult enough alone. Paying off only the minimal balance will in many instances, only pay the interest due and will not pay any of the principle or the balance due. It is very easy to get stuck in this rut and you will never even be able to get your debts paid, much less effectively manage them.
