help with best way to repay student loan and interest rates (pay, rate)

[luvs2laaf]

Hi, i'm trying to figure out what the best course of action would be for me.

my student loan is divided into smaller loans with different interest rates, but one monthly payment.

I won't get into specifics, but here are the general details:
$65,000 at 2.8% interest rate
$40,000 at 4.8% interest rate
$4,000 at 6.6% interest rate

so I know the rule of thumb is to pay down the one with the highest interest rate, but I've been applying my principal payments to the one with 2.8%... here's my reasoning: because I'm still accruing more in interest per day than the higher interest rate loans. But recently someone told me that I was doing the math wrong and tried to explain it to me... but I didn't fully understand.

Can someone tell me what to do? my goal here is to accrue the least amount of interest by the time everything is paid off. i don't need a "psychological boost" knowing that I've paid off a loan if it's going to cost me more in the long run.

thanks so much for any advice!

[FL2MT]

Very simple, pay off the loans with the higher interest rates first. That will save you the most money over both the short and long term.

To explain it a bit better, I'm going to break your loans down a bit by splitting them up..
Let's say you now have
A - FIFTEEN $4,000 loans at 2.8% interest rate
B - TEN $4,000 loans at 4.8% interest rate
C - ONE $4,000 at 6.6% interest rate

Which one of those sixteen $4,000 loans would you pay off first? Easier to see that way I hope.
(yeah I know there's another $1,000 in loan A, just making the math a bit easier)