Finance - Which to pay first?

Apoco · 11-07-2019, 05:03 PM

The strict financial answer is "Pay off the higher interest rate first".

...but if it were ME? I'd pay off the car loan first. The feeling of "awww yesss it's paid off!" is just too good.

mosesbotbol · 11-07-2019, 05:06 PM

Quote:

Originally Posted by Apoco

The strict financial answer is "Pay off the higher interest rate first".

...but if it were ME? I'd pay off the car loan first. The feeling of "awww yesss it's paid off!" is just too good.

The car is at 4.4%. I too would like to get the car paid off and explore a refinance on the home.

dijit · 11-08-2019, 06:37 AM

I dont see this as a completely cut and dried case. The fact that extra payments on the car go into a savings account instead of applying to the principle makes it sound like the way the car load is written there may be a penalty for early payment and the savings account is how they attempt to delay your paying it off first. If that is not the case then debt snowballing applies and the smaller of the two should get the extra payment to get rid of it sooner and then move on to the next larger.

mosesbotbol · 11-08-2019, 07:29 AM

Quote:

Originally Posted by dijit

I dont see this as a completely cut and dried case.

I apologize for not be so clear. Within the credit union site which allows me to make principal only payments does not allow me to associate an external bank account. I pay my monthly payment direct from my primary bank to the credit union. If I want a principal only payment, I must do that from within the credit union site; hence transferring money to savings account I needed to open to be a part of the credit union.

Not ideal, but not the end of the world either.

dijit · 11-08-2019, 09:42 AM

Quote:

Originally Posted by mosesbotbol

I apologize for not be so clear. Within the credit union site which allows me to make principal only payments does not allow me to associate an external bank account. I pay my monthly payment direct from my primary bank to the credit union. If I want a principal only payment, I must do that from within the credit union site; hence transferring money to savings account I needed to open to be a part of the credit union.

Not ideal, but not the end of the world either.

Based on this information then I agree with those saying Dave Ramsey plan. As an avid practitioner of that plan I can say it works very well. About 4 more years and I will be screaming "I AM DEBT FREE"

11-07-2019, 05:03 PM	#1
Apoco Nerd with social skills Join Date: May 2010 First Name: Alex Location: Chattanooga, TN Posts: 1,286 Trading: (37)	Re: Finance - Which to pay first? The strict financial answer is "Pay off the higher interest rate first". ...but if it were ME? I'd pay off the car loan first. The feeling of "awww yesss it's paid off!" is just too good.

11-08-2019, 06:37 AM	#3
dijit Have My Own Room Join Date: Feb 2012 First Name: Mike Location: Brownsburg, Indiana Posts: 2,186 Trading: (48)	Re: Finance - Which to pay first? I dont see this as a completely cut and dried case. The fact that extra payments on the car go into a savings account instead of applying to the principle makes it sound like the way the car load is written there may be a penalty for early payment and the savings account is how they attempt to delay your paying it off first. If that is not the case then debt snowballing applies and the smaller of the two should get the extra payment to get rid of it sooner and then move on to the next larger. __________________ Sporting goods raffle for a great cause. PM me for tickets.