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Credit Card Payoff Optimization Problem with specified loan amount and monthly payment

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    Credit Card Payoff Optimization Problem with specified loan amount and monthly payment

    I am looking to get help with creating a payoff optimization formula in excel given the following inputs

    Credit Cards monthly payment Balance
    credit card #1 30 708.36
    credit card #2 32 986.23
    credit card #3 86 2,784.26
    credit card #4 34 1,088.1
    credit card #5 53 1,858.97
    credit card #6 68 2,275.56
    credit card #7 27 907.57
    credit card #8 87 3,612.76
    credit card #9 25 620.89
    credit card #10 52 1,879.85
    credit card #11 81 2,469.38


    Loan Amount 5,000
    Monthly Payment 500

    What i am looking to create is something that can pick the best combination of balances and payments to get close to or just a bit over the Loan Amount and the Monthly payment as these two are the restrictions in the calculation.

    Any help with this is greatly appreciated.

    Thanks,

    Danny

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    Forum Guru shg's Avatar
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    Re: Credit Card Payoff Optimization Problem with specified loan amount and monthly payment

    Pay them off by interest rate, highest first.
    Entia non sunt multiplicanda sine necessitate

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    Re: Credit Card Payoff Optimization Problem with specified loan amount and monthly payment

    Thanks for the answer. What I was looking for was a way to compare the payments on the credit cards that are being made and the payment of a consolidation loan. if the payments are the payments are the same and the interest rate is half of what the credit card interest rates are then it makes sense to do so. The problem now is what is the right mix of credit cards to pay off given the balances and payments to maximize the use of the consolidation loan.

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    Forum Guru shg's Avatar
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    Re: Credit Card Payoff Optimization Problem with specified loan amount and monthly payment

    Again: Sort the cards descending by interest rate, and pay them off from the top of the list. Balances don't matter.

    Then cut them into small pieces.

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