But, the money that I am going to use is for investment. It is not easy to save. IF I use it, I will be losing half of the profit. But then, if I don't pay the loan now, I am afraid the BLR will increase in the years to come.That's mean, I am losing too. What is the best solution?? please... Thank you so much
2007-07-29 22:44:03 · 6 answers · asked by Lana_Luna_Soraya 3 in Business & Finance ➔ Personal Finance
Maybe you should do an anylasis of the situation. Figure out how much u are going to loss from your investments, and then estimate how much you're going to loss if the BLR increases. By looking at that data you'll be able to figure out whether to pay the loan or keep your investment money.
My suggestion is to pay the loan. The faster u are out of debt the better. Investment profit can be generated again.
2007-07-29 23:04:03 · answer #1 · answered by keep_out85 2 · 1⤊ 0⤋
A good way to look at this is to think about it this way. Would you borrow the money at the interest rate your loan is to invest it? Probably not, so go ahead and pay it off, then use the "payment" you would have been making to rebuild your investments.
If you invest at 12%, but you have a loan at 18%, your actually return on your money is -6%. However if you pay off the loan you make 18% on your money immediately.
2007-08-06 08:29:09 · answer #2 · answered by Stealth555 2 · 0⤊ 0⤋
The basic theory is that you use the money for which ever the higher rate of interest is on..so if you can invest at 20% and
your interest on the loan is 12%, invest.
I your interest is 20%, and you can only invest at 5%, PAY OFF THE LOAN!!
2007-07-30 07:10:53 · answer #3 · answered by zanthus 5 · 1⤊ 0⤋
Why don't you refinance at a flat rate, instead of depleting your savings. You will still be able to claim the interest on the loan, and collect from your investments too.
2007-07-30 05:59:44 · answer #4 · answered by PEGGY S 7 · 1⤊ 0⤋
if you're paying interest on that loan then it's better to pay off the loan, then continue to save and rebuild your savings and don't get into that kind of situation again.
2007-08-06 03:24:08 · answer #5 · answered by sophieb 7 · 0⤊ 0⤋
you work hard for you money -- let it work as hard for you. my advise is to look and see which has the best interest rate -- go with the highest -- if it investing is higher invest = debt it is higher -- reduce debt -- believe you will be reducing debt.
2007-08-05 10:17:00 · answer #6 · answered by mister ed 7 · 1⤊ 0⤋