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Student Debt/Unencumbered Car
Posted on 6/10/16 at 9:10 am
Posted on 6/10/16 at 9:10 am
Wise money men/woman of the TD, I come to you seeking advice.
My SO graduated college with about $26k in student loans. $10K is in her name with the interest rates between 3-6%. Then there is a $16K loan in the mothers name with an interest rate around 8%. She has a Jeep Cherokee overland with 70k miles, unencumbered that has a KBB of around $20k.
We are thinking about selling the Jeep to fully pay off the $16K loan and then financing a used car with presumably a lower interest rate than the student loan has.
The car that she is looking at is a 2005 Lexus RX with 127K miles on it, for $8K. So if she were to do this she would be changing her situation from a Jeep w/ 70k Miles and $26K with interest rate as high as 8%, to a Lexus with 127k miles and total debt of 18k with the interest rates all between 3-6%.
So essentially I'm asking do y'all think that it is a smart move to pay down the $8k in debt and high interest rate in exchange for 50k additional miles on the car?
My SO graduated college with about $26k in student loans. $10K is in her name with the interest rates between 3-6%. Then there is a $16K loan in the mothers name with an interest rate around 8%. She has a Jeep Cherokee overland with 70k miles, unencumbered that has a KBB of around $20k.
We are thinking about selling the Jeep to fully pay off the $16K loan and then financing a used car with presumably a lower interest rate than the student loan has.
The car that she is looking at is a 2005 Lexus RX with 127K miles on it, for $8K. So if she were to do this she would be changing her situation from a Jeep w/ 70k Miles and $26K with interest rate as high as 8%, to a Lexus with 127k miles and total debt of 18k with the interest rates all between 3-6%.
So essentially I'm asking do y'all think that it is a smart move to pay down the $8k in debt and high interest rate in exchange for 50k additional miles on the car?
3
Posted on 6/10/16 at 9:39 am to RebelliousGooner
You are assuming that you will get the full $20K for her current vehicle. Plus, I don't think anyone is going to finance a 11 year old vehicle with a good interest rate. I may be wrong, but you are making some big assumptions IMO.
What is the term on the $16K loan, could the mother refi with a company such as SoFi?
What is the term on the $16K loan, could the mother refi with a company such as SoFi?
Posted on 6/10/16 at 9:45 am to LSUSUPERSTAR
I'm assuming that the Jeep sells to the dealership for 16k, but I agree on the interest rate that's a big assumption.
Terms off the top of my head, I don't have them in front of me are 10 years, with 8.6% interest rate.
Need to look into SoFi, I really would like for her to drop a chunk of that debt.
Terms off the top of my head, I don't have them in front of me are 10 years, with 8.6% interest rate.
Need to look into SoFi, I really would like for her to drop a chunk of that debt.
Posted on 6/10/16 at 6:30 pm to RebelliousGooner
I would not, just put all the money you can per month and pay off the student loans starting with the highest interest ones
The student loans are on a 10 year note? The used car will be what term?
And I agree with previous poster, don't be looking for good rates on that old of a car
The student loans are on a 10 year note? The used car will be what term?
And I agree with previous poster, don't be looking for good rates on that old of a car
Posted on 6/11/16 at 6:11 am to RebelliousGooner
how far does she drive in a week? A year? How fuel efficient is the jeep vs the Lexus? I think it's a good idea to cash out on the jeep and get rid of 8% debt, but this old Lexus is not the only possible replacement. Keep looking.....she can prob do better in a used car.
Posted on 6/11/16 at 8:16 am to hungryone
What's her credit score? This will help determine what sort of loan rate she could get. First things first you need to try and consolidate all the loans through Sofi (or like service)because that is free.
This post was edited on 6/11/16 at 8:17 am
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