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paying off vehicle loan
Posted on 7/3/15 at 1:56 am
Posted on 7/3/15 at 1:56 am
Truck loan on a vehicle I use basically on weekends (co. car) - so the loan amount isn't much about $9000. The note is about $300 and I've been doubling up on it to get it down to $9000. My question is I have a decent bonus coming up and I'm considering just paying off the loan with the bonus or dump this money into the market and let it sit?
The rate is about 3.45% (loan) and the thing that I'm trying to wrap my head around is a few things:
1. the market is doing better than the interest rate I have on the loan so just dump that money in the market and let it work for me
2. By doing this I'm forgoing loosing the chance of investing $9000 I'll never get caught back up b/c the loan note is only about $300/mo. B/c once the loan is paid off the monies I was applying to the truck would just be applied to stock market.
If it was a cc it would be easier to process but the interest rate on the loan is so low.
Does this make common sense?
The rate is about 3.45% (loan) and the thing that I'm trying to wrap my head around is a few things:
1. the market is doing better than the interest rate I have on the loan so just dump that money in the market and let it work for me
2. By doing this I'm forgoing loosing the chance of investing $9000 I'll never get caught back up b/c the loan note is only about $300/mo. B/c once the loan is paid off the monies I was applying to the truck would just be applied to stock market.
If it was a cc it would be easier to process but the interest rate on the loan is so low.
Does this make common sense?
Posted on 7/3/15 at 5:43 am to Gorilla Ball
pay off the loan.
Market returns are not guaranteed.
Consider this your cash position.
After paying off the loan, dollar cost average into a low cost mutual fund by sending the same dollar amount as the loan was to a low cost mutual fund.
Market returns are not guaranteed.
Consider this your cash position.
After paying off the loan, dollar cost average into a low cost mutual fund by sending the same dollar amount as the loan was to a low cost mutual fund.
Posted on 7/3/15 at 6:27 am to Gorilla Ball
A 3.45% guaranteed ROI isn't bad, especially these days. Frankly I think it's a tossup and would decide based on how much free cash you have sitting around in case you suddenly need a bunch.
That said it's only $9000, the return one way or another isn't life-changing. We're talking $300/year in interest and inflation alone will cut that bill by a third or more. There are almost certainly other things you can do that will save you even more money than that.
That said it's only $9000, the return one way or another isn't life-changing. We're talking $300/year in interest and inflation alone will cut that bill by a third or more. There are almost certainly other things you can do that will save you even more money than that.
Posted on 7/3/15 at 7:06 am to Gorilla Ball
I'm usually a proponent of leveraging and investing, but I would definitely pay off he car in your situation.
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