08-05-2009 06:20 AM
I currently have a 27000 auto loan (from May 2009) with an interest rate of 13.xx%
Which would make more financial sense? Paying the monthly payment due (562.xx) every month and saving 200 for a refi down payment next may?
or paying 200 every week (making the monthly payment 800), waiting a year and re-financing
Or Paying 575 every three weeks, and therefore making 5 extra payments over one year?
08-05-2009 08:19 AM
First, go to the mirror and look at that person looking at you and promise them you will never do this again. Then make a second promise that you will never buy another 27,000 car at 13%.
Right now, work out a plan do you can pay cash for your next car. Then continue to pay cash for these cars the rest of your life.
Back to your question. This advice is from a financial perspective….
Paying off a loan faster is better than saving your money. Thus either of the last two options will do. I estimated you had a $27,000 outstanding balance at a 13.75% APR. Either of the last two options will put you at about $20,400 in one years time. The first option would leave you with an approximate balance of approx 23,750 and $2,400 cash in your pocket. Pay off the loan---fast!
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