Author Topic: Should I pay off my car loan?  (Read 2143 times)

Travel4Food$

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Should I pay off my car loan?
« on: September 12, 2016, 04:47:27 PM »
I have a car loan, currently at around $18K on 3.53%. I'm thinking of just paying it off but not sure if I should fork out a big chunk like that in one go. I'll have to sell it within the next year so will have to pay it off soon anyway. Should I just do it now?

JLee

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Re: Should I pay off my car loan?
« Reply #1 on: September 12, 2016, 08:21:06 PM »
It's an easier transaction to sell when you hold the title, but it's not necessary.  What's the rest of your financial situation look like?

newelljack

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Re: Should I pay off my car loan?
« Reply #2 on: September 12, 2016, 09:49:37 PM »
I have a car loan, currently at around $18K on 3.53%. I'm thinking of just paying it off but not sure if I should fork out a big chunk like that in one go. I'll have to sell it within the next year so will have to pay it off soon anyway. Should I just do it now?

Why would you "have" to sell it within the next year? Obviously put the money towards higher-interest credit first, but if that's your only debt, pay it off is my recommendation. It will free up the other $4-500/mo in payments.

nereo

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Re: Should I pay off my car loan?
« Reply #3 on: September 13, 2016, 06:49:38 AM »
I have a car loan, currently at around $18K on 3.53%. I'm thinking of just paying it off but not sure if I should fork out a big chunk like that in one go. I'll have to sell it within the next year so will have to pay it off soon anyway. Should I just do it now?

Well there's a lot of info missing, but in general I would first max out your IRA and 401(k)/403(b) contributions before tackling a debt with a 3.53% interest rate.

Assuming you have maxed out your tax-advantaged accounts and have an e-fund to your satisfaction and don't have any other higher-interest debt, you could decide to either pay that loan off or invest the money instead hoping you will earn >3.5%. What does the rest of your financial situation look like?

 

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