vania-janet/multiturn-rag-retrieval-data huggingface dataset:
"You'd have to look at the terms of the loan to be sure, but if the interest compounds weekly then you'd have to calculate the effect of 3 compounding periods, then compute for weekly payments. The balance after 3 weeks would be: Using Excel's PMT function for that principal balance, I get a weekly payment of $189.48.   If the interest doesn't compound, the principal balance will be about $8888.37 and the weekly payment would be $189.85. Note, however, that the terms of the loan could be completely customized, so you'd need to be sure that the payment and the amortization schedule make sense to you before you agree to the loan.  Since the interest is very high, I suspect this is a ""no credit needed"" car loan which are notorious for unfavorable (to the borrower) terms."
Actually the extra payment comes off the back end of the mortgage. So technically the mortgage is ony reduced one month.  However, banks always recalculate the amortization table when the last payment is paid or a payoff amount is requested. There is a difference between the two situations but that is a minor amount. The 30 year note offers flexibility that the 15 does not. Pick one, save money-15 year, get flexibility-30 year.
Basically you have 4 options: Use your cash to pay off the student loans. Put your cash in an interest-bearing savings account. Invest your cash, for example in the stock market. Spend your cash on fun stuff you want right now. The more you can avoid #4 the better it will be for you in the long term. But you're apparently wise enough that that wasn't included as an option in your question. To decide between 1, 2, and 3, the key questions are: What interest are you paying on the loan versus what return could you get on savings or investment? How much risk are you willing to take? How much cash do you need to keep on hand for unexpected expenses? What are the tax implications? Basically, if you are paying 2% interest on a loan, and you can get 3% interest on a savings account, then it makes sense to put the cash in a savings account rather than pay off the loan. You'll make more on the interest from the savings account than you'll pay on interest on the loan. If the best return you can get on a savings account is less than 2%, then you are better off to pay off the loan. However, you probably want to keep some cash reserve in case your car breaks down or you have a sudden large medical bill, etc. How much cash you keep depends on your lifestyle and how much risk you are comfortable with. I don't know what country you live in. At least here in the U.S., a savings account is extremely safe: even the bank goes bankrupt your money should be insured. You can probably get a much better return on your money by investing in the stock market, but then your returns are not guaranteed. You may even lose money. Personally I don't have a savings account. I put all my savings into fairly safe stocks, because savings accounts around here tend to pay about 1%, which is hardly worth even bothering. You also should consider tax implications. If you're a new grad maybe your income is low enough that your tax rates are low and this is a minor factor.
If you're a bit into the loan, then they're probably hoping that you'll take longer to pay off the loan. Is there a fee for refinancing the loan?  If so, be sure to take that into account. A smart way to approach it (assuming that the fees are low or zero) would be to continue making the same payment you had been before the refinance.  Then you'll end your loan ahead of schedule.  (This assumes that there's no prepayment penalty.)
At first guess, people have less and less disposable cash/income for a down payment which subsequently results in longer loan duration. I thought I recall reading an article not too long ago where average auto loan term was 70 something months and average new car is $30k+. That’s a lot of $$$ for a country where median household income is $50k.
You almost never want to repay a pre-2012 student loan early. As you've realised, you can put the money in an ISA instead and earn more interest than you're paying on the loan. If you withdrew money from the ISA each month to replace the repayments being taken from your salary, there'd be money left in the ISA when you finished repaying the loan. This is also the cheapest debt you'll ever have, so if you repay it now and then end up borrowing money elsewhere in the future, you'll probably be worse off. In particular, if you expect to have a mortgage at some point, you'll probably be better off keeping the money to add to a deposit rather than repaying it now and then borrowing more on the mortgage. You should also consider how long it'll take you to repay the loan normally. If you don't expect to finish repaying within 25 years, you'd be throwing money away by repaying early. This is more of an issue for the larger post-2012 loans.
The typical process is to look at the savings and see how many months it will take to break even on the closing costs. Since you've stated there are no costs, even 1/8% drop in rates is going to save you money. A savings of over 1.5% even on a sub 100K loan is nothing to ignore. You first year interest savings will exceed $1200. How many hours does it take you to earn that much money? (this is a rhetorical question, if that wasn't obvious)
You should definitely pay the remaining loan amount as quickly as possible. A loan in bad debts means that Bank has written it off books as its a education loan and there is no collateral. The defaults do get report to CIBIL [Credit Information Bureau India] and as such you will have difficulties getting credit card / new loans in future. Talk to the Bank Manager and ask can you regularize the loan?  There are multiple options you would need to talk and find out; 1. You can negotiate and arrive at a number. Typically more than the principal outstanding and less than interest and penalties charged. 2. You can request to re-do the monthly payments with new duration, this will give you more time. 3. May one time large payment and subsequent amount in monthly payments. At the end its Bank's discretion whether to accept your terms or not.
"One part of the equation that I don't think you are considering is the loss in value of the car.  What will this 30K car be worth in 84 months or even 60 months?  This is dependent upon condition, but probably in the neighborhood of $8 to $10K.   If one is comfortable with that level of financial loss, I doubt they are concerned with the investment value of 27K over the loan of 30K @.9%. I also think it sets a bad precedent.  Many, and I used to be among them, consider a car payment a necessary evil.  Once you have one, it is a difficult habit to break.  Psychologically you feel richer when you drive a paid for car.  Will that advantage of positive thinking lead to higher earnings?  Its possible. The old testament book of proverbs gives many sound words of advice.  And you probably know this but it says:  ""...the borrower is slave to the lender"".  In my own experience, I feel there is a transformation that is beyond physical to being debt free."
The fluctuation of interest rates during the next year could easily dwarf the savings this attempt to improve your credit score will have; or the reverse is true. Will the loan improve your score enough to make a difference? It will not change the number of months old your oldest account is. It will increase the breadth of your accounts. Applying for the car loan will result in a short term decrease in the score because of the hard pull. The total impact will be harder to predict.  A few points either way will generally not have an impact on your rate. You will also notice the two cores in your question differ by more than 30 points. You can't control which number the lender will use. You also have to realize the number differs every day depending on when they pull it that month. The addition of a car loan, assuming you still have the loan when you buy the house, will not have a major impact on your ability to get afford the home mortgage. The bank cares about two numbers regarding monthly payments: the amount of your mortgage including principal, interest, taxes and insurance; and the amount of all other debt payments: car loan, school loans, credit cards. The PITI number should be no more than 28%-33% of your monthly income; the other payments no more than 10%.  If the auto loan payments fit in the 10% window, then the amount of money you can spend each month on the mortgage will not be impacted. If it is too large, then they will want to see a smaller amount of your income to go to PITI. If you buy the car, either by cash or by loan, after you apply for the mortgage they will be concerned because you are impacting directly numbers they are using to evaluate your financial health. I have experienced a delay because the buyer bought a car the week before closing. The biggest impact on your ability to get the loan is the greater than 20% down payment, Assuming you can still do that if you pay cash for the car.  Don't deplete your savings to get to the 50% down payment level. Keep money for closing costs, moving expenses, furnishing, plus other emergencies. Make it clear that you can easily cover the 20% level, and are willing to go higher to make the loan numbers work.
To avoid this, you can pay the interest as you go before it is capitalized, which will save you from having to pay even more interest later on. As to which method is better, just as they told you right on the form, the ""Apply as Refund"" method will save you the most money in the long run. However, as I said at the beginning, this election only applies if you make a payment within 120 days from receiving loan funds. Since you are already out of school and in repayment, I don't think it matters at all what you select here. For any students reading this and thinking about loans, I want to issue a warning. Student loans can ruin people later in life. If you truly feel that taking out a loan is the only way you'll be able to get the education you need, minimize these as much as possible. Borrow as little as possible, pay as much as you can as early as you can, and plan on knocking these out ASAP. Great Lakes has a few pages that discuss these topics:"
You will eventually at this rate pay off the loan (at $200 a month for all 12 months); this isn't dissimilar to a 30 year mortgage in terms of percent interest to principal (in fact, it's better!). $50 a month times twelve is $600; 400 payments would take care of it (so a bit over 30 years). However, as you go you pay more principal and less interest, so you will actually pay it off in 15 years if you continue paying $200 a month exactly. What you may be seeing in your case is a combination of things: In months you pay less (ie, $100, say), the extra $45 in interest needs to go somewhere. It effectively becomes part of the principal, but from what I've seen that doesn't always happen directly - ie, they account it differently at least for a short time (up to a year, in my experience). This is because of tax laws, if I understand correctly - the amount you pay in interest is tax-deductible, but not the amount of the principal - so it's important for you to have as much called 'interest' as possible. Thus, if you pay $100 this month and $200 next month, that total of $300 is paying ~$290 of interest and $10 of principal, just as if you'd paid it $150 each month. If you had any penalties, such as for late payments, those come out off the top before interest; they may sometimes take that out as well. All in all, I strongly suggest having an enforced minimum (on your end) of the interest amount at least; that prevents you from being in a situation where your loan grows. If you can't always hit $200, that's fine; but at least hit $150 every single month. Otherwise you have a never ending cycle of student loan debt that you really don't want to be in. Separately, on the $1000 payment: As long as you make sure it's not assigned in such a way that the lender only accepts a month's worth at a time (which shouldn't happen, but there are shady lenders), it shouldn't matter what is called 'principal' and what is called 'interest'.
"Credit reports have line items that, if all is well, say ""paid as agreed."" A car loan almost certainly gets reported. In your case it probably says the happy ""paid as agreed.""  It will continue to say that if you pay it off in full. You can get the happy ""paid as agreed"" from a credit card too.  You can get it by paying the balance by the due date every month, or paying the mininum, or anything in between, on time. But you'll blow less money in interest if you pay each bill in full each month. You don't have to carry a balance. In the US you can get a free credit report once a year from each of the three credit bureaus. Here's the way to do that with minimal upsell/cross-sell hassles. https://www.annualcreditreport.com/  In your situation you'd probably be smart to ask for a credit report every four months (from each bureau in turn) so you can see how things are going.  They don't give you your FICO score for free, but you don't really care about that until you're going for a big loan, like for a condo. It might be good to take a look at one of those free credit reports real soon, as you prepare to close out your car loan. If you need other loans, consider working with a credit union. They sometimes offer better interest rates, and they often are diligent about making credit bureau reports for their good customers; they help you build credit. You mentioned wanting to cut back on insurance coverage. It's a worthy goal, but it's generally called ""self-insuring"" in the business.  If you cancel your collision coverage and then wreck your car, you absorb the cost of replacing it. So think about your personal ability to handle that kind of risk."
Now, what if I were to spend the entire $2,000 limit on a single purchase? I've been saving up in anticipation of this purchase and therefore have the money already set aside in the bank, so I could pay off the entire $2k immediately. There is no problem with doing this.  There's a bit of a time delay in credit reporting, so if you pay immediately in the middle of your statement period it will never even be reported that your card was maxed out.   Make the purchase some time in the middle of the billing period, then log in to your account and pay the total before the statement period closes.  If you let it roll to the next statement period, it will be reported that your account is maxed out, and possibly, you will be charged interest and potentially a fee for exceeding your limit.  Your utilization is only calculated in a snapshot, there is no history kept.  Even if you let your card be reported at 100% utilization, you could pay the balance that month with 0% then reported and your score will bounce back as though nothing ever happened. Separately, if you have had this card for a long while you may want to request a credit line increase.
Some questions: Will you need a car after 18 months?  What are you going to do then? How likely are you able to go over the mileage? Granted paying $300 per month seems somewhat attractive as a fixed cost.  However lease are notorious for forcing people into making bad decisions.  If your car is over miles, or there is some slight damage (even normal wear and tear), or you customize your car (such as window tint) the dealer can demand extra dollars or force you to purchase the car for more than it is actually worth.   The bottom line is leasing is one of the most expensive ways to own a vehicle, and while you have a great income you have a poor net worth.  So yes I would say it is somewhat irresponsible for you to own a vehicle. If I was in your shoes, I would cut my gym expenses, cut my retirement contributions to the match, and buy another used car.  I understand you may have some burnout over your last car, but it is the best mathematical choice. Having said all that you have a great income and you can absorb a lot of less than efficient decisions.  You will probably be okay leasing the car.  I would suggest going for a longer term, or cutting something to pay off the student loans earlier.  This way there is some cushion between when the lease ends and the student loan ends.   This way, when lease turn in comes, you will have some room in your budget to pay some fees as you won't have your student loan payment (assuming around 1400/month) that you can then pay to the dealer.
From a pure monetary point of view, paying 5% to earn 1%  doesn't make sense... Though there is also the question of retaining enough immediately available emergency funds, which may make the loan worth considering anyway. On the other hand, if you consider putting the funds into the stock market rather than a bank account, you have quite  decent odds of earning more than 5%. In that case, this becomes an opportunity for leveraged investment. I'm doing exactly that with my mortgage.
When you add points, a break-even date comes into play. That date varies depending on the rate and number of points. As an approximate example, having one point at those rates would have a break-even point of about 5 years. At that time, the amount you save with the lower rate makes up for the extra cash you paid for points. After that, you are saving money. If you don't plan on having the loan that long, the points are not worth it. Also, you need to calculate the break-even date based on your own parameters. I suggest searching for an online calculator or spreadsheet that supports point calculations. You may also be able to deduct 1/30th of your points every year. Ask you accountant about that.
Scenario #2 is most likely will generate the best long-term financial outcome. If your friends emergency fund is truly excessive and can afford to be reduced by the amount required to payoff the vehicle loan then that will save a few dollars. Scenario #3 is not an approach I would recommend. However, if your friend has to choose between paying off the loan or maxing his Roth... Making a few assumptions regarding the loan, I figure it is probably a 4 year - $13.5k. Which means he is paying somewhere below $40 a month in interest.  As JAGnalyst speaks to people often over estimate the spread they can make with another investment compared to the interest rate on a loan. However, the effect of compounded, tax-free returns can not be ignored when you are discussing a 22 year old person contributing to a Roth IRA.  Doing some calculations, assuming the car is being paid off on the first payment your friend will save just under $1000. The total interest that would have been paid over the life of the loan. If your friend adds $3600, approximately one year of payments, to their Roth IRA contributions -- just once. Assuming a 3.5% avg return and a retirement age of 65, the $3600 will be worth just south of $16k; a $12,400 return. Using the same investment return and tax assumptions and simplifying the $1000 savings as if it was all realized as a lump sum at the time of paying off the loan. That $1000 invested in a non-tax-advantaged investment (because the whole discussion is based on if the friend had to pick and lose the opportunity for the one year to make the additional Roth IRA contribution) would return $3047.
If you need / want the car, I would get the car.  Without car payments you can save your money again to get the house.  Moreover, I wouldn't want to be saddled with payments to the mortgage and car loan at the same time. Lastly, a car is a more temporary possession (10 years) vs a house (30+) years so shopping around for the house longer while you save money is a good thing.  I know you want to buy while prices are low, but I personally think it is more important to get a house that you want to live in later than settle for a cheap one you get a deal on now.
In the prior PMI discussions here, it's been stated that the bank is not obligated to remove PMI until the mortgage's natural amortization puts the debt at 78% LTV. So, paying in advance like this will not automatically remove the PMI.  Nor will a lump sum payment be certain to move the next payment ahead a year. If it's entered as a principal prepayment, the next month's payment is still due. In the world of coupon books, if you sent in a year's payments, you'd not benefit from the interest saved, in one year you'd owe what the amortization table tells you.  There's no free lunch when it comes to mortgages or finance in general. This is why we usually caution that one should not be cash poor the day after buying a house. Best to save 30%, put down 20%, and have a cushion after the closing.
The key here is the bank, they hold the title to the car and as such have the final say in things. The best thing you can do is to pay off the loan.  Could you work like crazy and pay off the car in 6 months to a year? The next best thing would be to sell the car.  You will probably have to cover the depreciation out of pocket.  You will also need to have some cash to buy a different car, but buy it for cash like you should have done in the first place. The worst option and what most people opt for, which is why they are broke, is to seek to refinance the car.  I am not sure why you would have to wait 6 months to a year to refinance, but unless you have truly horrific credit, a local bank or credit union will be happy for your business.  Choose this option if you want to continue to be broke for the next five years or so. Once any of those happen it will be easy to re-title the car in your name only provided you are on good terms with the girlfriend.  It is just a matter of going to the local title office and her signing over her interest in the car. My hope is that you understand the series of foolish decisions that you made in this vehicle purchase and avoid them in the future.  Or, at the very least, you consciously make the decision to appear wealthy rather than actually being wealthy.
"You owe only $38,860 to pay off your loan now, possibly less.   From what you say about your loan, tell me if I got this right: 30 year loan $75,780 original loan amount 9% annual interest rate $609.74 monthly payment You have made 272 payments Payment number 273 is not due until late 2019, possibly early 2020 If I have correctly figured out what you have done, you have been making monthly payments early by pulling out payment coupons before they are due and sending them in with payment.  You are about 4 years ahead on your payments.   If I have this correct, if you called the bank and asked ""what is my payoff amount if I want to pay this loan off tomorrow"" they would answer something like $38,860.  When you pay a loan off early, you don't just owe the sum of the coupons still remaining.  In your case, you owe at least $16,000 less! Indeed, if there is some way to convert your 4 years of pre-payments into an early payment, you would owe even less than $38,860.  I don't know banking law well enough to know if that is possible.   You should stop pulling coupons out of your book and paying them early.  Any payments you make between now and when your next payment is actually due (late 2019 sometime?) you should tell the bank you want applied as an early payment.  This will bring your total owed amount down much faster than pulling coupons out of your book and making payments years early.   If there is someone in your family who understands banking pretty well, maybe they can help you sort this out.  I don't know who to refer you to for more personal help, but I really do think you have more than $16,000 to gain by changing how you are paying your mortgage.   Good luck!"
A loan that does not begin with at least a 20% deposit and run through a term of no longer than 48 months is the world's way of telling you that you can't afford this vehicle.   Consumer-driven cars are rapidly depreciating assets. Attenuating the loan to 70 months or longer means that payments will likely not keep up with depreciation, thus trapping the buyer in an upside down loan for the entire term.