Should I pay this off?

[Anonymous]

Ok so I've been making a lot of money during the pandemic. I have been able to save about 10k since March. Sitting in the bank I have about 35k saved. I have a harley loan with about 10k left on it. I also have a car payment with about 15k left on it. Each one has about 3 years left on it. After they are both paid off I plan on buying a brand new truck. Should I pay off the harley and then double up payments on the car? Or should I just keep banking money and let them run their course? Kinda at a loss here.

[AllZero]

@Anonymous. If you could advise APR on the loans, it would help with member feedback 

[Anonymous]

Not sure exactly. Wanna say the car is about 3 (maybe a little lower) and the bike is like 4 

[SouthJamaica]

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@Anonymous wrote:

Ok so I've been making a lot of money during the pandemic. I have been able to save about 10k since March. Sitting in the bank I have about 35k saved. I have a harley loan with about 10k left on it. I also have a car payment with about 15k left on it. Each one has about 3 years left on it. After they are both paid off I plan on buying a brand new truck. Should I pay off the harley and then double up payments on the car? Or should I just keep banking money and let them run their course? Kinda at a loss here.

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What are your goals? If your goal is to get a score boost, pay them both down to 9% of the original amount, but not down to zero. Then you'll be in the sweet spot for credit scores, which might help you get the lowest interest rate on the truck loan.

[M_Smart007]

I agree on paying down the Harley to a hair below 9%.

Paying it off would actually ding you.

[Kforce]

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@SouthJamaica wrote:

What are your goals?  If your goal is to get a score boost, pay them both down to 9% of the original amount, but not down to zero. Then you'll be in the sweet spot for credit scores, which might help you get the lowest interest rate on the truck loan.

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The way the majority of car & motorcycle loans work, if you pay them down they still require your normal monthly payment. This means a clock is running between your <9 and it becoming zero.  It might take a month to report and be on all 3 reports and then be paid off in 3 or 4 more months, so you need to be ready to buy your truck when you pay them down to <9%.

PS: You only need one loan, you can pay off the other early.

If you have any other loan such as a mortgage you don't have to play this game and can pay them off if you want.

[Anonymous]

You are losing just on interest. I would fully payoff one. Go get your truck then as soon as your truck shows on your credit I would pay off the other 

[coltspacers]

Pay both of the loans off now and be debt free.  Don't buy a new truck and just save those payments!!  Payed off trucks drive really nice.......

[randomguy1]

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@Kforce wrote:

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@SouthJamaica wrote:

What are your goals?  If your goal is to get a score boost, pay them both down to 9% of the original amount, but not down to zero. Then you'll be in the sweet spot for credit scores, which might help you get the lowest interest rate on the truck loan.

---

The way the majority of car & motorcycle loans work, if you pay them down they still require your normal monthly payment. This means a clock is running between your <9 and it becoming zero.  It might take a month to report and be on all 3 reports and then be paid off in 3 or 4 more months, so you need to be ready to buy your truck when you pay them down to <9%.

PS: You only need one loan, you can pay off the other early.

If you have any other loan such as a mortgage you don't have to play this game and can pay them off if you want.

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Echo what the other people said about the under 9% and only need one of them reporting under 9%. I would consider paying off the loan with the higher monthly payment if you have DTI issues. If that's fine, pay off the one with higher interest. 

Since we are in a Personal Financr sub-forum - One thing that hasn't been mentioned is does your 35k include your 6 month emergency fund? How fast can you replenish that fund if you suffer a loss of income? This can happen in a moment's notice. Does not always need to be job related, could be medical or something else. I wouldn't deplete my 6 month fund without putting some thought and planning into it. Especially so in this economic climate.