Payoff question

mrmumbels · #1 (**permalink**) 10-03-2009, 04:27 AM

I have a car loan balanced at 8k with a 5.9% interest and I have a home equity at 17k with a 4% interest. Which would make more sense to pay off first?

Like2Plan · #2 (**permalink**) 10-03-2009, 04:52 AM

Assuming they are both fixed interest, I would target the car.

zakity · #3 (**permalink**) 10-03-2009, 08:49 AM

Yep, the car... It has a higher interest rate. It is also the lower amount that is owed.

creditcardfree · #4 (**permalink**) 10-03-2009, 09:14 AM

I agree: the car. Knock it out first then hit the home equity loan.

JourneyCC · #5 (**permalink**) 10-05-2009, 04:59 AM

Car loan is not helping you at tax time. It is also a depreciating asset. It really can affect your FICO score and debt/income ratio value as well. This is a no-brainer.......pay the car first.

kgloh_23 · #6 (**permalink**) 10-06-2009, 07:57 AM

Pay car loan first! Car is depreciate and interest is higher! then the balance money pay off home equity or invest with better return rate (more than 5% to beat your 4% home interest)
Assume loan interest rate is fixed.

jasonnoguchi · #7 (**permalink**) 10-06-2009, 07:59 AM

Car. Period.

EconoMutt · #8 (**permalink**) 10-11-2009, 12:30 PM

Definitely pay the car first.
That's what I'm doing.

AtlantaLife&Health · #9 (**permalink**) 10-21-2009, 11:16 PM

Go after the auto loan first. Then take the money you were spending on the auto loan and put it toward to HELOC balance each month.