Is it better to put money in a savings account until you reach the amount that you owe on your car.. then pay it off.. Or is it better to just pay over your minumum payment each month?
2006-06-06 03:28:49 · 15 answers · asked by Nick T 2 in Business & Finance ➔ Credit
pay month to month
the finance charge is already figured into your monthly payments...it would be silly to pay it all off with savings
2006-06-06 03:31:07 · answer #1 · answered by Anonymous · 1⤊ 1⤋
1
2016-09-26 09:54:37 · answer #2 · answered by Calandra 3 · 0⤊ 0⤋
It depends on where the higher interest is. If you have a 0% interest car loan, then by all means put the extra into an account and earn interest on it until you are able to pay the car off in full.
If however, your car loan interest rate is higher than the rate you will make on your savings, then use the extra money to pay towards the principal of the loan, month to month.
2006-06-06 09:40:38 · answer #3 · answered by kathy059 6 · 0⤊ 0⤋
Depends on the rate of interest on the loan vs. savings. However, paying the auto loan over time builds credit where you will not build any through savings. Also, if you use your savings to pay for a car, if an emergency comes up, you may not have the money necessary for the emergency plus your bills. Then you have screwed your credit.
2006-06-06 06:05:37 · answer #4 · answered by Oblivious 3 · 0⤊ 0⤋
The loan rate is higher than the rate you will earn in a savings account. Since there is also no tax break you get on car loans, it makes sense to pay off the car loan as soon as possible.
2006-06-06 03:37:20 · answer #5 · answered by ash 3 · 0⤊ 0⤋
If you pay every 2 weeks instead of monthly it will shorten the length of your loan as well as reduce the amount of interest that you have to pay. The more you can pay now the better it is because it will be less you have to pay extra in interest.
2006-06-06 08:16:52 · answer #6 · answered by pianoman25 2 · 0⤊ 0⤋
Double up on your payments if you can, the first 2 yrs your doing nothing but paying on the interest of the loan.
2006-06-06 05:38:35 · answer #7 · answered by Anonymous · 0⤊ 0⤋
your question is confusing to me. b/c if you put $ in a savings account til u have what u owe wont u get in trouble b/c ur not making the payments on the loan? idk. but i say pay over the minimum payments. if you have the $ in a savings u know its there and might use it for other things..
2006-06-06 03:32:46 · answer #8 · answered by amandax086 4 · 0⤊ 0⤋
Pay ove the monthly balance as you have extra money to pay -- with most loans the intrest is adjusted and the extra you pay goes directly to the principle. Call the finance company to verify.
2006-06-06 07:52:44 · answer #9 · answered by Miss Need 2 Know 2 · 0⤊ 0⤋
Unless the interest you make on the money is higher than the interest you pay on the loan, pay it off!
2006-06-06 03:31:45 · answer #10 · answered by Who?Me? 5 · 0⤊ 0⤋
only put the money in savings if the interest you are earning is higher than the interest you are paying on the loan.
2006-06-06 03:40:41 · answer #11 · answered by Kutekymmee 6 · 0⤊ 0⤋