I'm rebuilding my credit, I recently took a car loan with a very high interest rate..at the same time I'm starting to power save 2500 per month so I can purchase a home in a year. Myquestion is should I put 2000 more towards my car to have it paid in 9 months or keep paying the minimum so I can sock everything into savings?
2006-12-08 02:57:53 · 4 answers · asked by vi14mi 1 in Business & Finance ➔ Credit
You are LOSING MONEY if you don't pay off that car fast. The only reason you would want to put it all into savings is if you thought that housing prices and/or loan rates were going to rise significantly in the next 2-3 year period. And since house prices are likely to keep falling, you don't really need to worry about that. What's the benefit of driving to that home just to keep a load of bad debt around? Plus, having the car loan on your credit record could hurt the rate you get on your mortgage.
2006-12-08 03:02:10 · answer #1 · answered by Qwyrx 6 · 0⤊ 0⤋
What is your credit score? What is your car loan interest rate? So you ask if you should put $2k more towards your car to have it paid off in 9 months. This means that you have at least a $18k car loan? That's your first mistake. You did not need an $18k car. I truly suggest selling the vehicle and getting a more reasonable car $5k-8k. You can find many used, but reliable vehicles, Hondas or Toyotas are my pick.
Also, you say you need a credit line to help rebuild your credit? Is that why you got the car loan? Actually, a line of credit such as a car loan does not necessarily help rebuild your credit. It is more importantly to have your cc debt paid off and make sure you pay your bills on time. Time is what helps rebuild credit.
2006-12-08 11:17:44 · answer #2 · answered by Anonymous · 0⤊ 0⤋
You are PAYING (interest=money in someone else's pocket, not yours) while you still pay on the car. Pay it off FAST and then sink all that wad in to your saving for a house. So what if your house gets put off another month or so...you will be free and clear of the vehicle debt!
Good luck and what a smart person you are!
:)
2006-12-08 11:07:21 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Pay off your car first! then use what you had as a payment and use that for your savings. You will feel better knowing that your car is paid for and that you don't have to worry about it anymore.
2006-12-08 11:08:34 · answer #4 · answered by dutchfam7 4 · 0⤊ 0⤋