by reilly » Wed Sep 28, 2011 7:45 pm
You are making this much more complicated than it needs to be:
"I have $1500 at 14.9% and $1800 at 23.99%
I am assessing the viability of consolidating to a simple interest personal loan at 30%."
How could you ever think that consolidating a 14.9% loan and a 23.99% loan into a 30% loan is a good thing? All you are doing is making your interest rate soar.
"Assuming $300 is spent per month to pay debts"
Ok, you've got $3300 in debt, and you have $300 per month to pay on them? Well, that gives you a total of around 11 months to pay them off. Why bother with anything about refinancing, consolidating, or doing something else to change it up. Just bust your hump and get them paid off, then the interest rate won't make a difference.
"and the two minimum conditions are met but I optimize my payments to minimize paid interest, would I spend more money paying the two independent, compounded interest debts or a single $3300 personal loan on simple interest with $300 monthly payments?"
Ok, here's the simplified math for you:
$1500 at 14.9%, paying $250 per month will take 6 months to pay off. You'll pay $111 in interest during those 6 months. $1800 at 23.99%, paying $50 for the first 6 months, then $300 for the next will take 11 months to pay off. You'll pay $395 in interest during those 11 months. The total interest you'll pay is $506.
$3300 at 30%, paying $300 per month will take 11 months to pay off. You'll pay $907 in interest during those 11 months.
Of course, this doesn't factor in the interest being added to your account each month, or the balance going down each month as you make payments, but it gives you an idea.