vania-janet/multiturn-rag-retrieval-data huggingface dataset:
Here is one that I just tried out http://loan.bizcalcs.com/Calculator.asp?Calc=Loan-Early-Payoff You'll probably be surprised how much effect a little bit of extra towards a loan can make in the long term. Put your current college loan details in to it and then see what the effect of an extra 150 a month is. I know you've implied that you really don't have anything extra each month and that is fine. Figure out an amount that gets you moving towards your goals and then start working on a way to make it. Figuring out how to make or squeeze an extra n dollars out of your budget every 30 days is much less daunting than thinking about paying off 50K. You said you are working in IT, I don't know where you live but in my city there are lots of decent IT related jobs. Your first goal might need to be to find a better one. If possible move around balances until you've got interest rates you can deal with and now that you have solid numbers to plan with consider the effect of making smaller goals. Would you feel as bad if you had half as much debt? How about if you got rid of 10K of debt? Or just your credit cards? I know I felt a huge relief when I cut my overall debt in half. It felt like a huge part of my burden had lifted, and it had. I could start seeing the end of the tunnel. I think that one of the biggest changes in my life since then has been the way I look at and think about money and debt. I didn't really have to sacrifice much. I learned to travel cheaply and whenever I met a goal I'd reward myself with a small trip. Today I have a very low mortgage payment and I pay my full credit balances each month so I have no revolving bad debt. I wish you luck and I know exactly where you are standing right now.
It's definitely NOT a good idea to pay off one of the smaller loans in your case - a $4k payment split across all the loans would be better than repaying the 5% / $4k loan completely, as it's the most beneficial of your loans and thus is last priority for repayment. A payment that splits across all the loans equally is, in effect, a partial repayment on a loan with an interest rate of 6.82% (weighed average rate of all your loans).  It's not as good as repaying a 7% loan, but almost as good. It might be an option to save up until you can repay one of your 7% loans, but it depends - if it takes a lot of time, then you would've paid unneccessary interest during that time.
To directly answer your question, the best choice is to pay cash and place the rest on your student loan. This is saving you from paying more interest.  To offer some advise, consider purchasing a cheaper car to place more money towards your student loan debt. This will be the best financial decision in the long-term.  I suspect the reason you are considering financing this vehicle is that the cash payment feels like a lot. Trust your instinct here. This vehicle sounds like large splurge considering your current debt, and your gut is telling you as much. Be patient. Use your liquid funds to get a more affordable vehicle and attack the debt. That is setting yourself up for financial success.
Scenario A: get a $60 tank of gas once a month, immediately pay it off when I get home  Scenario B: Spend about $300 in $25-$50 increments throughout the month on things like groceries, food, gas, etc, but immediately pay it off every time  Would my credit get better and/or faster in Scenario B due to the more use?
"There are a lot of things that go into your credit score, but the following steps are core to building it: Now, in your case, you obviously have some flexibility in your monthly budget since you're considering paying down your college loan faster.  You have to weigh whether it would be better to pay off the loan that much faster, or just save the money towards buying the car.  If you can pile up enough cash to buy the car (and still leave yourself an emergency fund) it would be better to buy the car than add another interest payment.  As other answers have noted, you don't want to get in a situation where you have no cash for ""unexpected events"". Some links of interest:"
Simply put, the interest you're paying on your loans is eating into any gains you have in the stock market.  So, figure out how much you're paying in interest and consider the feasibility of paying off some of the loan.  Also figure in if you would be selling the stock at a profit or a loss.   Generally speaking, a home loan is typically long-term, with a high principal.  I believe the consensus is that it is typically not worth paying down extra on it.  A car loan, though, is much shorter term, with a lower principal.  It may be worth it to pay that down. I would certainly consider paying down the loan with 10% interest, even without running any numbers. What about doing this without selling stock?  The reason I suggest that is that you should not sell the stock unless you truly need the money or for some material reason(s) related to the company, the market, etc.  (Of course, one other reason would be to cut losses.) Unless I was looking to sell some stock anyway, I would try other ways to come up with the money to pay down the highest interest loan, at least.  If you are thinking of selling stock to pay down debt, definitely run the numbers.
I am going to break rank slightly with the consensus so far.  Here's the deal, it probably DOES help your credit slightly to pay it multiple times per month if it isn't a hassle, but the bump is likely to be minimal and very temporary.  Here's why: A key component of your score is your credit usage ratio. That is the ratio of how much of your credit limits you are using. You want to keep this number down as low as possible. Now here is where it gets tricky. Although you have a grace period to pay off your card with no interest, the credit card companies don't generally report the balance as of the due date. They either report the high balance or an average balance over the month. That is, it is based on how much you use, not how much balance you carry over each month. It isn't very intuitive, but that's just how it is. So technically, keeping that balance lower over the course of the month WILL probably help you, but the credit usage ratio is generally a rolling average over the last x months, so the effect will wear off quickly. So it is probably not worth doing unless you know you are going to apply for a loan in the next 6 months and need a temporary, small bump. Another consideration is that paying early provides no real financial benefit in terms of finance charges, but you are giving up liquidity which does have some value.    1) You probably could get at least a little interest for keeping the money in your account a few more weeks. 2) If you have a major financial emergency, e.g. broken down car, you might appreciate the fact that you kept your options open to carry that balance over a month.
"As others have already pointed out, there is no monetary sensible reason to borrow at 5% cost to invest at 1% return. However, just because it doesn't make perfect sense financially doesn't mean it can't make sense for peace of mind. And you should not dismiss the peace of mind argument out of hand. Ignoring tax effects, credit score effects, cost of higher levels of insurance required, etc., and assuming a five year repayment plan, borrowing $15,000 at 5% will cost you about $283/month for a total cost of $16,980. 1% interest on the same $15,000 would give you about $12/month. In other words, your ""loan premium"" is $21/month (interest expense about $33/month on the car loan, reduced by interest earned $12/month on the retained savings) plus the capital repayment amount. If you were to take the money out of savings you would probably want to replenish that over a similar time period (ignoring interest, saving $15,000 in five years means $250/month), so this boils down to the $21/month interest premium. Now consider that the times when an emergency fund is most often needed are very often the times when banks will be reluctant to extend a loan (a job loss being a common example). While foreclosing on an existing loan can still happen, as long as you keep making payments, I suspect that most banks are far more willing to overlook the fact that you would not have qualified for the loan after the job loss. If a loss of income situation develops after you pay the car with your savings without a loan, you start out with $15,000 in the bank plus whatever ""car payments to yourself"" you have been able to save afterwards. Depending on when things turn bad for you, this could mean that you having only half of the savings that you used to, but of course you also have no car payment expense (which is the same as you do now). If a loss of income situation develops while you are still paying off the car, you start out with $30,000 in the bank instead of $15,000, but run the risk of having to make the car payments with money out of your savings.
If I were you, I would pay off the car loan today. You already have an excellent credit score.  Practically speaking, there is no difference between a 750 score and an 850 score; you are already eligible for the best loan rates.  The fact that you are continuing to use 5 credit cards and that you still have a mortgage tells me that this car loan will have a negligible impact on your score (and your life). By the way, if you had told me that your score was low, I would still tell you to pay off the loan, but for a different reason.  In that case, I would tell you to stop worrying about your score, and start getting your financial life in order by eliminating debt.  Take care of your finances by reducing the amount of debt in your life, and the score will take care of itself.  I realize that the financial industry stresses the importance of a high score, but they are also the ones that sell you the debt necessary to obtain the high score.
I think everyone else answered before you added the info about your car loan in your comment. While it makes sense to pay off loans with the highest interest rate first, keep in mind that in most cases you can deduct mortgage interest from your taxable income. So the after-tax rate of interest that you're paying on your 8.6% second mortgage will be less than your 7% car loan, assuming that your tax bracket is more than 18% (federal and state combined). If you plan to use your funds to pay down debt, definitely attack the car loan first.
You mention that you would quit right after getting approved. But in the United States there would be one last check as a part of closing. Therefore it would be best to wait until after closing to quit your job. Waiting until after closing would also protect you from some hiccup that causes a delay in closing, thus requiring the need to reapply for the loan.
"Money is a token that you can trade to other people for favors. Debt is a tool that allows you to ask for favors earlier than you might otherwise. What you have currently is: If the very worst were to happen, such as: You would owe $23,000 favors, and your ""salary"" wouldn't make a difference. What is a responsible amount to put toward a car? This is a tricky question to answer. Statistically speaking the very worst isn't worth your consideration. Only the ""very bad"", or ""kinda annoying"" circumstances are worth worrying about. The things that have a >5% chance of actually happening to you. Some of the ""very bad"" things that could happen (10k+ favors): Some of the ""kinda annoying"" things that could happen (~5k favors): So now that these issues are identified, we can settle on a time frame. This is very important. Your $30,000 in favors owed are not due in the next year. If your student loans have a typical 10-year payoff, then your risk management strategy only requires that you keep $3,000 in favors (approx) because that's how many are due in the next year. Except you have more than student loans for favors owed to others. You have rent. You eat food. You need to socialize. You need to meet your various needs. Each of these things will cost a certain number of favors in the next year. Add all of them up. Pretending that this data was correct (it obviously isn't) you'd owe $27,500 in favors if you made no money. Up until this point, I've been treating the data as though there's no income. So how does your income work with all of this? Simple, until you've saved 6-12 months of your expenses (not salary) in an FDIC or NCUSIF insured savings account, you have no free income. If you don't have savings to save yourself when bad things happen, you will start having more stress (what if something breaks? how will I survive till my next paycheck? etc.).
"I don't have enough reputation in this community to comment yet, so this ""answer"" is really just a minor furtherance of JoeTaxpayer's comment... THe only thing I might add to this great answer - make all minimum payments, and send all extra available cash to the highest interest card. If OP will pay in full after 6 month, this may make little difference, but it will be a few dollars in his pocket instead of the bank. – JoeTaxpayer♦ Dec 2 at 17:42 ...on Ben Miller's excellent answer. Once you have taken JoeTaxpayer's advice and ordered your cards by interest rate and have paid off the highest interest card first, take that same payment and add it to your next-highest card's minimum payment. Once THAT is payed off, take the combined amounts that you were paying to cards one and two and apply it all to card three along with its minimum payment. You see where this is going. By aggregating your payments thusly, each card will get paid off successively more quickly than the previous one, without increasing your overall payments to the cards, and you are retiring the highest-interest debt first. Your last card will then be paid off in record time, because you have combined all of the payments for cards 1-4. One other amplification: Since we don't know which account has which interest rate, it may be more advantageous to order them by balance, with the smallest first. That way you retire the first card quickly, which gives you a sense of accomplishment, and by the time you reach your highest balance card, you have snowballed all of your payments and are now throwing boulders instead of pebbles at it. You'll have to do that math to see which method has the most benefit. Then roll it all into the car payment. Then roll it into your student debt. Etc."
For example, there are Balloon Loans where you have small monthly payments in the beginning and large monthly payments in the last year. Is the math any different? Not really - you still apply the one important formula, interest owed = (p*I)/12, on a monthly basis. Then you break down the amount you paid for the month into the interest owed you just calculated and principal. You apply that principal amount to lowering your principal outstanding for the next month. Supposing that what you have posted is accurate, the most likely scenario is that you have a structured 5 year car loan where your monthly payments are smaller than the required fixed monthly payment for a 5 year loan, so even after 2 years, you owe as much or more than you did in the beginning! That means you have some large balloon payments towards the end of your loan. All of this is just part of the contract and has nothing to do with your prepay. Maybe I'm incorrect in my thinking, but I have a question about prepaying a loan. When you take out a mortgage on a home or a car loan, it is my understanding that for the first years of payment you are paying mostly interest. Correct. So, let's take a mortgage loan that allows prepayment without penalty. If I have a 30 year mortgage and I have paid it for 15 years, by the 16th year almost all the interest on the 30 year loan has been paid to the bank and I'm only paying primarily principle for the remainder of the loan. Incorrect. It seems counter-intuitive, but even in year 16, about 53% of your monthly payment still goes to interest!!! It is hard to see this unless you try to do the calculations yourself in a spreadsheet. If suddenly I come into a large sum of money and decide I want to pay off the mortgage in the 16th year, but the bank has already received all the interest computed for 30 years, shouldn't the bank recompute the interest for 16 years and then recalculate what's actually owed in effect on a 16 year loan not a 30 year loan? It is my understanding that the bank doesn't do this. What they do is just tell you the balance owed under the 30 year agreement and that's your payoff amount.
Like all other loan-vs-savings questions, it depends on the terms of the loan. If you have a choice, the usual answer is to pay off the loan with the worst terms (which usually means the highest interest rate) first, and only start with savings when you've paid off all the high-interest loans entirely. If your student loan is on US terms, then pay it off as soon as you can, unless you have commercial debt (credit-card or unsecured personal loan), which you should pay off first, or unless you have or are realistically likely to get eligibility for a forgiveness program. But it does depends on the terms of the debt, which in turn depend on the country you studied in; on UK terms it's a very bad idea to pay off a student loan any faster than you have to.  Interest is restricted to the rate of inflation, so good investments probably beat the interest rate of the student loan; the required repayments vary with your income, so savings are more useful than debt repayment if you encounter income difficulties (e.g unemployment) in the future, and finally the debt is automatically forgiven after 30 years, so you may never have to pay it all back anyway - so why pay it off voluntarily if it would get forgiven eventually anyway?
Let's say I have two loans (say 2 car loans), and the high interest loan has a higher balance.  Both have a monthly payment of, say, $500. My income fluctuates a lot, so occasionally I only have $750.  I get hit with big fees those months, or maybe I just have to eat beans for those months.  I come on some extra money.  Maybe enough to get rid of the low interest small loan. Paying off the smaller loan frees up cash.  I don't have to eat beans on the bad months.
You'll still be without a car at this point, though, so you'd have to buy another one (or live without for a while), and you'd still have a payment of some sort, but perhaps a more manageable one ($5000 @ 12% @ 5 years means something a bit over $100 a month, for example.) I recommend that if you can get by without a car for a while, option 2 is your best bet. All of these will require some financial care for a while, and probably cutting back on expenses for a year or two; but realistically, you shouldn't expect anything else. Get a budgeting app if it will help see how to do this. As far as getting out of the loan without paying it, I don't recommend that at all. Your credit will be ruined for at least seven years, and 660 is not bad at all really, and then would take yet more years to recover. You will likely be sued for the balance plus collection costs, beyond repossession. The consequences would be far, far worse than just paying it off, and I mean that financially as well as ethically."
I would not go down to zero cash on hand. I would keep $1,000 on hand and pay off most of the credit card balance.  Then I would pay off the last $1,000 on the credit card followed by building my emergency savings back up.
so probably a stupid question but anyway.  Suppose I take a loan of 10lakhs INR(20k C$ or 15US$) in india for studying abroad.  and get a job after studying ther like 2-3 years later. How easily I can pay off the loan. Considering I can get a 50k c$ job and live frugally.   I think i could easily pay off the loan in a year or two. is that right. Or would I suffer and end up paying installments (right word?) every month for like 10 -15 years.  I know i may be exaggerating too much on latter part. But still. Would it be easy since currency is quite 'strong' as in you earn quite a good money for even a starting job or even minimum wage job.  Thank you
If you have a 7% student loan and the car loan is only 3%, you're better off paying the minimum on the car and using your cash to pay down your student loan. Unless your student loan balance is significantly more than the 8k you need to finance (like a 20k or 30k loan). Also remember that a car is a depreciating asset. I pay off cars as fast as I can. They are terrible debt to have. A home can rise in value, offsetting a mortgage. Your education keeps you employed and employable and will certainly not make you dumber, so that is a win. But a car? You pay $15k for a car that will be worth $14k the next day and $10k a year from now. It's easy to get underwater with a car loan if the down payment is small, interest rate high, and the car loses value quickly. To make sure I answer your questions: Do you guys think it's a good idea to put that much down on the car? If you can afford it and it will not interfere with repayment of much higher interest debts, then yes. A car loan is a major liability, so if you can minimize the debt, you'll be better off. What interest rate is reasonable based on my credit score? I am not a banker, loan officer, or dealer, so I cannot answer this with much credibility. But given today's market, 2.5 - 4% seems reasonable. Do you think I'll get approved? Probably, but only one way to find out!
Keep in mind that by fully paying off one of your loans, you will reduce your minimum repayments. This will make you feel richer than you actually are. This will make you buy stuff that it seems like you can afford, probably putting some of it on credit. As you can't actually afford this, this will leave you, in a years time, with the same amount of debt you have now or more, but with a slightly bigger tv. Assuming your home loan has no penalties for paying off extra, then put all 11k into there to keep your monthly repayments as high as possible.
There is a 3rd option: take the cash back offer, but get the money from a auto loan from your bank or credit  union. The loan will only be for. $22,500 which can still be a better deal than option B. Of course the monthly payment can make it harder to qualify for the mortgage. Using the MS Excel goal seek tool and the pmt() function:  will make the total payment equal to 24K. Both numbers are well above the rates charged by my credit union so option C would be cheaper than option B.
The only way this suggestion works is if you can realize a higher rate of return on the investment than the payoff of the loan.  There's no guarantee of that, so it can be a risky strategy from the standpoint that you'll end up paying more for the car when all is said and done.
Buy a modest vehicle with a manageable payment.  Keep the payment low enough ($200-300/month) to keep your DTI (Debt-To-Income) ratio clear.  The short-term ding to your credit for new credit should disappear in 3-6 months (your time horizon).  Having a mix of credit is part of the credit scoring model, so having an installment loan is not a bad thing.  Relax.
Yep, basically no loans for me for at least two years and new credit cards are at a higher interest rate then I'm comfortable with.  That's fine.  I have two cars that are fully paid for, just paid off one credit card last week and will have the other one paid off before the end of the year. And I have a savings account with a positive balance.  All of this happened by moving to a different house where my rent is $1,500 per month cheaper than I was paying on a house.
I will start with the assumption that you will never have any late payments and will fully pay off the loan. This may be a big assumption, but if you can't assume that, then you wouldn't have asked the question in the first place. The answer depends on your income: You should calculate how much student loan interest you can deduct before and after the switch, and adjust the interest rate accordingly to compensate for any difference.