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Another auto loan scenario.
Posted on 11/3/24 at 5:01 pm
Posted on 11/3/24 at 5:01 pm
Purchaser is financing two automobile loans and desires to prepay each.
Terms-36 months for both
Interest rates-older vehicle 1.9% APR, newer vehicle 4.9%
Monthly payments-about $500 each.
Assume the older vehicle is 18 months old and the newer vehicle is 3 months old.
The purchaser will add $400-$600 each month to the note(s).
Is it best to apply the extra payment to the older vehicle or the newer vehicle or equally?
Terms-36 months for both
Interest rates-older vehicle 1.9% APR, newer vehicle 4.9%
Monthly payments-about $500 each.
Assume the older vehicle is 18 months old and the newer vehicle is 3 months old.
The purchaser will add $400-$600 each month to the note(s).
Is it best to apply the extra payment to the older vehicle or the newer vehicle or equally?
1
Posted on 11/3/24 at 5:22 pm to CharleyLake
Not sure what kind of question this is, but besides the mentality of momentum gained from a debt snowball, it’s always financially advantageous to pay off the higher interest debt first.
So the “older vehicle” with the higher interest should be the focus of any extra payments.
So the “older vehicle” with the higher interest should be the focus of any extra payments.
Posted on 11/3/24 at 10:20 pm to LSUtigerME
Thank you for the comment but I stated that the older vehicle has the lower rate of interest,
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