Uncle Ben
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Use it to pay off your credit cards first. They're probably costing you 20% interest! Then kill your credit cards. Keep one somewhere difficult to access in case of emergency. |
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ngufra
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it depends.
Keeping your loan can help your credit report.
if you repay some of your loan, you can't get the money again should you need it, but if you know you won't need it why acrue 4.75 % then pay taxes on that income and at the same time pay 6% on money you are borrowing ?
Are there any penalties for paying early your car loan ?
if you do repay some of your car loan will it shorten the duration of the loan or reduce the repayment but keep the length to 4.5 years ?
Personnally, i would use the money to repay some of the car loan, and keep some just in case.
Use a couple of hundred to have fun too. finaces do not have to be boring! |
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goombajoe
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use it to pay bills then bank the money u would be using to pay them |
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sage
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Pay off the loan. |
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Conrado
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INterest |
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soxrcat
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Yes. The math says to pay off the higher interest debt.
Another consideration is Income Tax. Your paycheck is taxed, and any money that you save is after tax. If you want to put some money away, you need to put it in a "tax deferred" account like a 401K retirement account.
In other words, If you put $10K of wages into a 401K, and live on the $10K gift, you will be ahead several thousand dollars in taxes. |
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Chels
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first, i wouldn't go flashing that all up on the internet...
secondly, i suggest finding a financial adviser... this is what they do!!!
thirdly, if it were me, i'd put 5g towards the car, refinance, and put the other 5g in the interest bearing account just in case something happens where you need some fast cash...
i'm sure i could come up with some fantastic mathematical equation to determine which is best in what amount of time, but i really should get back to work....
good luck! |
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Misti J
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You could pay it towards your car and then save $400 a month. You would have $10,000 in 2 years. So you'll have both in less time then it would take to pay off your car. |
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SDD
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Unless you think you're going to need the cash in the next 4.5 years, you would do better to pay off the load. Think about it. Your after-tax return on the bank interest is probably less than 4%. You're paying 6% on the loan. You'd be getting a 2% better return to pay off the loan. |
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PlantGeek
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Put the money towards the car because it has the higher interest rate. You will pay it off completely significantly sooner and if you want to save money, take the $400 you were putting towards the car and put it in the bank then. Just don't increase your spending after you pay the car off and you'll be fine. |
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din_jig
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1. Pay the Car Loan with the Amount
2. In the meantime, talk to the Bank or credit union if they can change the remaining balance to be paid for next 3 years with approximate monthly payment = $152 or 2 years with approximate monthly payment = $221.
3. Save the remaining Monthly Payment like $400-$152= $248 or $400-$221=$179 in the Savings account monthly to accrue 4.75%
In this way, you are paying most of your car loan that costs higher interest rate and also started a saving that would have been paid for monthly Car Loan. |
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mushuflare
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what else would you do w/ it, stick it in your pocket and carry it around with you? Of course you should put it in the bank!coughFREEMONEYcough |
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6feetinheels
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The answer of course is yes. Gone are the days when folks kept money under the mattress. It won;t do you any good there in the long run. Interest from the bank is a good thing. I check on it daily and it does accrue. |
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what
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Don't invest at 4.75%, that is a very poor, and low interest rate. If you have that to invest, and can live with out it, start you IRA, you will turn it into allot of money 40 years out, I suspect you are young. look for an IRA in American Fund Mutuals that pay 10-14% (on a ten year average). The younger friends will probably say pay off the car, but six per cent isn't bad, and you knew you would be paying that when you thought about buying it. After 4.5 years, your car will be worth less than the money you have paid for it. The mutual fund IRA will nearly double in value in perhaps six years. And you will need your IRA when you retire. You make the call: short time gratification, or long term more security..... |
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Heinz M
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Paying off the car loan you get 6% (which you won't have to keep paying) |
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Dan G
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If you plan to leave the money in the bank for a long time then it would be worthwhile to build the interest. However if the bills are stressful right now putting the money on the car would lower your monthly payments and make life a bit easyer. |
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Innocentt
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put in bank |
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Paulie Walnuts
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You should probably invest all of it in the stock market...if you have any balls. |
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OTC503
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If you can manage your monthly to yearly living situation without having to spend your gift then it would be wise to save or invest or loan your gift for future gains. Personally I would look around for higher interest returns. Yes I believe there out there. The bank would be my last resort for a 4.75%. You can have your car paid off within a year if you find the right place to stick that money. Good luck to you. I wish I had I gift for $10.000,,,hehehe,,,just dreamin. |
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Darknessis
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of course. Do so to get more money. You can wait to pay off your car loan. |
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Gerald
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Ask any person with financial experience and they will tell you
BECOME DEBT FREE
AND DO NOT BUY ANY THING ELSE BUT
REALESTATE.
Stay out of the car dealerships or the day will come the repo man will show up and take that 4 wheel beauty away. Do not ever risk your credit rating on cars. A car is transportation.
The only thing cool about car payments is that they are due every month.
What is even more cool that that ---NO CASH IN YOUR POCKET
Yes, pay the car off--then when it is totally paid for put the $400 in the savings. You are too young and do not know about investing---the bank is safe. TRUST ME THE BANK IS SAFE---STAY OUT OF IT ----Wait till christmas to blow all the cash on good times.
See you in church |
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VATreasures
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Mathematically you come out ahead paying off the car loan. However you if you do not have much savings, you might be in a situation where you would need worse debt that 6% if an emergency comes up.
I would suggest putting 1/2 of the money toward the car loan and 1/2 in a savings account. This will shorten your loan by at least a year and a half. You can make your loan even shorter by paying extra principal if you have extra money in your budget. |
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Club_obi_wan
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Sell your car - 2500 upside down? So what, use the 10k & pay the difference, use another $2500 and buy a used honda civic.
Take the 5000 left over, put it in paypal - 5% annual return paid monthly.
Use the $400 you save by not having a car payment any more and contribute $300 every month to paypal or other savings/retirement, and hold the other $100 for unforseen maintenance.
This advice is free of charge :) |
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