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should I pay off truck loan?

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    should I pay off truck loan?

    Wondering if I should pay truck loan off? Owe about $15000 yet at 2.2% interest. Truck about is still worth about $32000. I have the money to pay it off and still have 8 months emergency fund. Also owe about $78000 on house at 3.25% about 12 years left on 15 year mortgage. Would u just pay alot toward truck and keep savings

    #2
    Originally posted by rockrv22 View Post
    Wondering if I should pay truck loan off? Owe about $15000 yet at 2.2% interest. Truck about is still worth about $32000. I have the money to pay it off and still have 8 months emergency fund. Also owe about $78000 on house at 3.25% about 12 years left on 15 year mortgage. Would u just pay alot toward truck and keep savings
    Sounds like a good idea to just pay it off...although, that would depend on your plan/situation with retirement savings. Are those adequate?

    I'd also be tempted to put that $15k towards the house, but having the truck payment free'd up would be good for cash flow.

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      #3
      Assuming you are on track for retirement then I see no issue with using that money to pay off the truck loan. I would then throw what you would have paid to the car loan each month to the mortgage and get that paid off years faster.

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        #4
        It would be better to settle it earlier and pay it off. Letís say you have an extra few thousand dollars ó maybe from a tax refund, a bonus, or some other quick windfall. How can you best put it to use? There are a lot of options, and high-interest rate debt goes on top of the pile. But if you havenít done that kind of borrowing, and you have a comfortable cushion of emergency cash, it would be wise to consider throwing it toward your auto loan. Paying off auto loans early can help you cope with sudden life changes and afford you more freedom in the long run.

        This is, by the way, is the same logic that suggests itís a good idea to get out of your mortgage ó despite its low rate ó before you retire.

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          #5
          I'd probably pay it off even though you could probably do better than 2.2% by investing the money.

          It's a good feeling to not have auto debt.
          Brian

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            #6
            I assume you also don't have any other debt. I also would pay off the truck loan. A paid for car is much nicer to drive!
            My other blog is Your Organized Friend.

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              #7
              I found an interesting phenomenon when I paid off my truck this year: I can't bring myself to buy a new one as easily as I used to when I had a non-stop payment. When I had a loan, I would just trade it in when it got boring and get a new truck with a renewed loan. The perpetual loan state. But I had a shiny new truck. Now that I own it and I won't allow myself to get a loan (have to have cash), now I won't buy a new one. This one is 6 years old and a year beyond when I would have renewed the loan process. But it's low mileage, great shape and still does everything I need. So I look at Edmunds.com and fight the urge to get a loan. So far I'm staying strong.

              So, yes, a paid off car does drive differently.

              Tom

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