Well I have the $ to pay off my Z. Should I wait and finish up the payments or save on the interest? My interest rate is 4%.

I should save over $1900.00.

Or will this help or hurt my credit, since I have only made 9 car payments.

I am leaning towards paying it off. I love the fact that I will not have car payment on either car.

Charles

 

Depends on what you will otherwise use the money for.

If it is going to to otherwise sit in a savings account earning very little interest, yes, if you will need it for a down payment on a house etc etc, then no.

 

I've been told that you get loans for the reasoning that you'll pay back at a later time. Hold on to the money you never know when a rainy day might come by.

 

Hey man,
I paid cash for my car, and I can tell you it's a damn good feeling to have that title in the safe. From a financial standpoint, if you need to build your credit, keep the loan going. Consistenly repaying large loans over a period of time is great for your credit, and at 4%, you're not taking *too* much of an interest hit.

If you look at it purely from a dollar standpoint, ask yourself it that money can MAKE you $1900 over the life of your loan. If it can't, then you're better off paying off the loan and saving the $1900 in interest....

The simple equation:

If you put the money in a 5 year CD, what would it earn? If it only earns $1200 (Fictitious numbers here), then the money is actually going to cost you $700 against the $1900 in interest you'll pay on your loan. But if it can earn $2500 over the life of your loan, then it's actually going to make you $600 more than your interest is going to cost you, in which case, paying off your loan would not be the best thing to do.

Does that make sense?

To find out what the real numbers are, I'd visit your bank and talk to one of their advisors...they do this stuff for a living.

 

I'd leave the money in the Bank. Make your monthly payment
and before you know it the car will be paid off and you'll have $ in the bank. Thats even better than having no car payment.

If you spend the dough now to payoff the Z are you going to
save all that cash over the next few years?

Everyone knows saving isnt easy. Things come up in life unexpectedly. Personally it's very comforting to have a few bucks in the Bank.

 

Thanks guys for all the advice. I am not wiping my savings out, but yes, that is where the $ is coming out of. I have decided to go ahead and pay it off. I don't make much interest with it sitting in the bank. I already have Cd's, 2 IRA's, TSP retirement, and my wife's 401K. So I have my retirement working fairly well right now. Plus in 7 years I get a monthly retirement check for doing my 22 years of military service.

I am still putting the car payment in the bank every month, so its not like I will be blowing my money each month. I just don't like bills.

In the long run, I believe I will save $. Thanks again for all the advice.

Now I can start saving the extra money for Mods. Wheels, HID's, cruise, and Navigation.

Thanks again for all your advice.

 

pay off the car, the interest is paid for in the beginning. So if you pay it all off now, you will end up saving money

 

I'd take a middle approach; double your payments and finish in less than half the time!

 

Well, I just returned from the bank. Title is in the mail. I love having no more car payments. I probably saved over $1800 in interest. Most of the interest is made the first few years on a loan, so I saved a few bucks, A DVD/Navigation system to be exact.

Thanks again all for the advice.