I am about to pay off a large car loan. How can I get additional financial benefits?

Question

Last April, I took my first loan ever to pay for an SUV. The inital amount was about $16k at 6.99%. As of today, I have paid it down to just over $12k.

As a present, my parents gave me $10k to pay off the loan (and I'll be paying them back with little to no interest), so I can pay off the loan and still have enough money to feel comfortable.

But, is there any way I can "funnel" this $12k payment that I'm about to make through some payment channel so I can get additional benefits from it?

Specifically, I had hoped to use my Discover or Visa card to make the payment, so that I would get either cash back or flight credits.

However, the bank that holds my loan says I can only use credit cards to make loan payments via a cash advance, and neither of my cards will give me miles or cash back for a cash advance (or for credit checks either).

Does anyone know of a way I could make this work and get extra benefit from my payment (if not via credit cards, some other way)?

Answer 1

That would depend on the length of the auto loan. There used to be a lending rule years ago that went something like this. 70/30 which meant that 70% of the interest was paid in 30% of the length of the loan. I would take the ten grand, pay on the loan, pay off the balance as soon as possible and you will be money ahead. I would then pay off my parents at the same rate as the loan payments would have been, minus interest. That way you will be happy in saving the money and your parents will think a lot more of you for paying them back.

Answer 2

Just think yourself lucky you have such generous, thoughtful parents. The money you save in interest alone should be a big enough benefit.

Answer 3

Thank your parents who are helping you to payoff your debt. The money you save from not paying interest is your ROI.

Answer 4

i wouldnt mess around, just pay it off