If you had cash would you payoff your car loans or would you use the money for other things?

Question

I currently have two car's and I have a combined loan for them with with a low interest rate. If you had just enough money to pay the loan off would you or would you use the money for home improvements or furniture or what ever? I just wanted to get some ideas about what some people would do?

Answer 1

I would bank it. Cash is a good thing to have. If I had any debt w/ high interest rates then I might pay some toward that then try to consolidate it into a low interest loan. There again, showing you have cash in the bank would be beneficial.

I definitely would not spend it frivilously. The economy is changing. Having some cash handy might be very helpful a year or so from now.

Answer 2

It would depend on the interest rates, I would say. If the interest rate you would earn from a savings account is much better than the interest rate of the loan, then I'd put the money in savings. The interest you would be getting would be higher than the money you would be saving by paying down the car loan. There are tax implications to savings interest, so a small difference in rates would make paying off the loan a better choice.

If you weren't going to put the money into savings, then I'd say pay off the loan first. Home improvements would increase the value of your house, but you'd only see that benefit if you sold the house, not to mention that in most areas real estate is flat to falling, so now isn't a good time to sell.
If you were buying furniture, I'd say pay off the loans first with no question. furniture is a depreciating asset. It will lose value the longer you have it. So you'd be losing money by buying the furniture, and losing money by continuing to pay interest on your loan.

Answer 3

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Answer 4

It would depend. For me, I've been rebuilding my credit for a home loan and am now on the right track-- but what I need is lots of GOOD INFORMATION To be recorded each month, and LONG STANDING accounts-- I've had a car loan for about 2 years. I wouldnt pay it off beucase its helping up my score with the good history.

But i you have good credit, I'd pay if off-- or if you had some things you wanted, atleast pay it so you have less than a year left.

Answer 5

I'd take the Dave Ramsey method and pay off the debt first then save up money for an emergency fund and then store some cash away for the home improvement projects.

Home improvement over furniture because it will increase the value of your home. However get rid of the debt first.

Answer 6

Obviously i'll pay my car loans, because who knows about future? May be you become the world famous beggar....I have never bowed my head against anyone till now. And i don't want to bow my head at all. Actually, i will never buy a cycle by borrowing money from bank or friends. I know my family may not be happy with me. But its better to bow your head before own ones, rather than outsiders.....Right?

OK. As you ask, my answer is, "I'll pay the loans first.". And i hope everyone would've told the same answer...

Answer 7

I would pay off the car loan now and put the money that i would norm. be spending every month on the car loan i would put that toward home improvments.

Answer 8

If you need home improvements, that increases the value of your home and if needed, do them, the cars are ok? but if you pay off those two cars, the money saved there could be used to make home improvements....

If you ever needed to sell your house, the home improvements would help with the value of the home...do the kitchen and the bathroom first...

good luck..

Answer 9

Pay off the auto loan. Then continue paying the loan note to yourself. Now you have save the interest you would have paid on the loan and are gaining interest on your saved money.

Answer 10

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