So I am going to grad school in september, I have $5600 left to pay on my car and I have over $10K in savings. Grad school is going to cost $2000 a month if my student loan doesn't go through and I was thinking of keeping the savings money just in case. The money saved up is partially what I was saving to pay off the car (interest 8.9%) but now that there's school coming up I just don't want to go broke overnight.
I think I should pay off the car solely based on the fact that if I get a student loan at 7%, I will only have to start paying it off in 2 years whereas the car will be $300 every month whether or not I'm in school or I'm working.
If you were in my shoes, would you pay off the car or continue to make monthly payments instead? It's a depreciating value item so I didn't want to tie money into it, that's why I can't make up my mind.
Thanks.
2007-07-01 11:51:15 · 10 answers · asked by gabyrig 3 in Business & Finance ➔ Personal Finance
Why don't you hold off deciding until you see if your student loan comes through. Then if it does, go ahead and pay off the car.
2007-07-01 13:05:45 · answer #1 · answered by Judy 7 · 0⤊ 0⤋
A student loan for school is way better to have than to try and keep paying on your car loan while you are in school. By all means, pay off your car now.
2007-07-01 13:16:36 · answer #2 · answered by Anonymous · 0⤊ 0⤋
I agree with the others...pay off the car! You can lower your insurance coverage if you needed more money. Personal preference but I definitely think that paying off the car will help ease any stress or worry. Get that out of the way and then focus on school and tuition! Good luck!
2007-07-01 12:01:51 · answer #3 · answered by Stephen N 2 · 0⤊ 0⤋
every time you have a option to pay off charges or shop the money, there is one known question to ask. that gets you a greater robust return on you cash? in case you could shop at 2% mutually as paying 6% on your motor vehicle, you're dropping money. in case you have an investment which you will believe make you 10% and a similar 6% motor vehicle loan, you come out forward (brushing off the actuality a 10% investment return might maximum in all probability be very risky).
2016-10-03 09:03:29 · answer #4 · answered by ? 4 · 0⤊ 0⤋
Wait until you know for sure about the student loan. If it goest through, pay off the car. If not, you might need the savings for tuition.
Excellent question.
2007-07-01 13:28:36 · answer #5 · answered by jdkilp 7 · 0⤊ 0⤋
Unless you have your $10K in an account that is paying you better than 8.9%, then High School math should be all you need to figure out you are better off paying off the car!
2007-07-01 12:01:01 · answer #6 · answered by Anonymous · 0⤊ 0⤋
I would pay of my car, it would be on less dabt to worry about. Just the money you save in the high interest rate alone is worth it, plus thats 300 dollars a month you get to keep for your self to save or spend as you please
2007-07-01 11:57:20 · answer #7 · answered by rherald2 2 · 0⤊ 0⤋
If your car loan is half paid for, you paid about 70% of your interest. All Banks charge you more interest on the first half of any kind of loan, whether it's a personal loan,ist or 2nd mortgage. That's how they make their money.
2007-07-01 12:52:38 · answer #8 · answered by Anonymous · 0⤊ 0⤋
I would absoluely pay off the car in that situation. The numbers speak for themselves.
2007-07-01 11:54:23 · answer #9 · answered by John 5 · 0⤊ 0⤋
u might need the money to live on...dont pay off the car
2007-07-01 13:57:07 · answer #10 · answered by njyogibear 7 · 0⤊ 0⤋