vania-janet/multiturn-rag-retrieval-data huggingface dataset:
So many answers here are missing the mark.  I have a $100k mortgage--because that isn't paid off, I can't buy a car?  That's really misguided logic. You have a reasonably large amount of college debt and didn't mention any other debt-- It's a really big deal what kind of debt this is.  Is it unsecured debt through a private lender? Is it a federal loan from the Department of Education? Let's assume the worst possible (reasonable) situation.  You lose your job and spend the next year plus looking for work.  This is the boat numerous people out of college are in (far far far FAR more than the unemployment rates indicate).  Federal loans have somewhat reasonable (indentured servitude, but I digress) repayment strategies; you can base the payment on your current income through income-based and income-continent repayment plans.  If you're through a private lender, they still expect payment.  In both cases--because the US hit students with ridiculous lending practices, your interest rates are likely 5-10% or even higher. Given your take-home income is quite large and I don't know exactly the cost of living where you live--you have to make some reasonable decisions.  You can afford a car note for basically any car you want.  What's the worst that happens if you can't afford the car?  They take it back. If you can afford to feed yourself, house yourself, pay your other monthly bills...you make so much more than the median income in the US that I really don't see any issues. What you should do is write out all your monthly costs and figure out how much unallocated money you have, but I'd imagine you have enough money coming in to finance any reasonable new or used car.  Keep in mind new will have much higher insurance and costs, but if you pick a good car your headaches besides that will be minimal.
"It is typically best to pay minimum payments to 2 of the loans and pay aggressively on the third loan. Some will tell you to pay the highest interest rate loan off first because ""personal finance"" is about ""finance"" and mathematically that saves you the most interest. Some will tell you to pay the smallest balance loan off first because ""personal finance"" is ""personal"" and the psychological ""win"" of paying off a loan is more valuable than the small amount of interest difference between this strategy and paying off the loan with the highest interest rate first."
If you think you can pay off the entire amount you borrowed over the next 12 month, then you're getting an unsecured loan at around 4% APR, assuming you're borrowing for the whole year.   That's pretty good compared to what you can typically get at the credit union.  However, if you only need the money for, say, 3 months, that 4% fee effectively becomes a 16% APR! And, the real trouble comes when you don't pay it off by the end of the 12 month and the standard rate kicks in. If you do use the convenience check, be sure to put in your calendars a reminder that the balance is due -- set the reminder about a month before the last billing cycle of your 0% period. Make sure you also have sufficient cash flow and an automated payment setup to make sure you always pay at least the minimum due on time.  Depending on your banking history, you might be able to get away with one missed payment -- but more likely, you'll be penalized as soon as you miss a payment by a penny or a day -- and the 0% loan suddenly becomes very expensive. Read all the fine print, make sure you understand them, and set up a system to make sure you can play to the rules of the game.
"I'd put more money down and avoid financing. I personally don't think car debt is good debt and if you can't afford the car, you are better off with a cheaper car. Also, you should read up on the 0% offer before deciding to commit.   Here's one article that is slightly dated, but discusses some pros and cons of 0% financing. My main point though is that 0% financing is not ""free"" and you need to consider the cost of that financing before making the purchase.  Aside from the normal loan costs of having a monthly payment, possibly buying too much car by looking at monthly cost, etc., a 0% financing offer usually forces you to give the dealer/financing company any rebates that are due to you, in essence making the car cost more."
There needs to be more numbers with your choices, without those any answer is purely speculation. Assuming that India is much like the US, you are almost always better to go with a company leased car.  That is if you are not responsible for the lease if your employment ends with the company. Here in the US companies typically reimburse, so tax free, their employees for about 50 cents per mile, or about 31 cents per kilometer.  This barely covers the gas and insurance and falls way short when one includes deprecation and maintenance.  So it is better to have the company to pick up all those costs.      Borrowing money on a car is just plain dumb no matter what the interest rate.  So I would stick with choice number 1 or 3 depending on the arrangement for the company leased car. The next question becomes how much you should spend for a car?  I would say enough to keep you happy and safe, but not much more than that until you are wealthy.
As other's have said, paying off the student loan first makes the most sense because of That said, are you planning on staying in your house for a particularly long time?  If so, refinancing your mortgage into a fixed-rate loan might be the best use of your money long term.  Not sure how much time is left on your 5/1 ARM before the rate starts to float, but if rates rise, your mortgage could quickly become more expensive than your student loan.
Unless you are getting the loan from a loan shark, it is the most common case that each payment is applied to the interest accrued to date and the rest is applied towards reducing the principal. So, assuming that fortnightly means 26 equally-spaced payments during the year, the interest accrued at the end of the first fortnight is $660,000 x (0.0575/26) = $1459.62 and so the principal is reduced by $2299.61 - $1459.62 = $839.99 For the next payment, the principal still owing at the beginning of that fortnight will be $660,000-$839.99 = $659,160.01 and the interest accrued will be $659,160.01 x (0.0575/26) = $1457.76 and so slightly more of the principal will be reduced than the $839.99 of the previous payment. Lather, rinse, repeat until the loan is paid off which should occur at the end of 17.5 years (or after 455 biweekly payments). If the loan rate changes during this time (since you say that this is a variable-rate loan), the numbers quoted above will change too. And no, it is not the case that just %5.75 of the $2300 is interest, and the rest comes off the principle (sic)? Interest is computed on the principal amount still owed ($660,000 for starters and then decreasing fortnightly). not the loan payment amount. Edit After playing around with a spreadsheet a bit, I found that if payments are made every two weeks (14 days apart) rather than 26 equally spaced payments in one year as I used above, interest accrues at the rate of 5.75 x (14/365)% for the 14 days rather than at the rate of (5.75/26)% for the time between payments as I used above each 14 days, $2299.56 is paid as the biweekly mortgage payment instead of the $2299.61 stated by the OP, then 455 payments (slightly less than 17.5 calendar years when leap years are taken into account) will pay off the loan. In fact, that 455-th payment should be reduced by 65 cents.
"Everyone has made some good points that I was going to mention but to put it in terms that might make it easier to decide. As stated by others, paying off debt and being free is always the goal and desirable. However, you must also consider the ""efficiency"" of what you do as well. For example, there are two common types of student loans (there are others but let's focus on these) and that is subsidized and unsubsidized. The main difference? Subsidized loans don't earn interest on your balance while you are in school, it only happens when you graduate and come out of repayment grace period. Unsubsidized loans begin accumulating interest the moment they are disbursed, but you are not required to make payments on them until you graduate. All student loans are deferred until you graduate and exhaust your grace period or other means of deferring your payment, say for example a postponement or forbearance. However, it is often recommended that on UNSUBSIDIZED loans, you pay down your principle while still in school to avoid that massive interest amount that will get added to it when you are officially in repayment. On the other hand, it is often (if not always) recommended that you hold off on paying SUBSIDIZED loans until you are done and go into repayment, as for all intents and purposes its not costing you anything extra to wait. Family and parent loans are considered and treated more like personal loans, so treat them as such. Hope that helps. Also, don't forget to take advantage of the income based repayment options, as they will make the payments manageable enough to avoid making them a burden while you are trying to get a job and go post education. Further reading:  Income-Driven Plans (Department of Education) Income-Driven Repayment Plans (nelnet)"
The car company loans you money at 1 or 2% because it is part of the incentive to get you to buy the car.  Car company transactions are complex involving the manufacturer, the dealership, and the financing part of the car company. Not to mention Rebates, the used car transaction, and the leasing department. If they don't offer you a loan then the profit from that part of transaction is lost to an outside company. The better loan rates from the manufacturer are only with shorter term loans and without the rebate. That is why some suggest that you get the rebate, and then go to a credit union for the loan for lowest overall cost and greatest flexibility. The advertised rates are also only for the customers with great credit scores and the room in their clash flow to pay off the loan in a year or two. If you don't fit in that category, the rates will be higher.
So, in general, pay to the higher interest rate.  Some contrived reasons you would want to pay your auto  loan more could be:
"You are co-signer on his car loan. You have no ownership (unless the car is titled in both names).  One option (not the best, see below) is to buy the car from him.  Arrange your own financing (take over his loan or get a loan of your own to pay him for the car).  The bank(s) will help you take care of getting the title into your name.  And the bank holding the note will hold the title as well. Best advice is to get with him, sell the car. Take any money left after paying off the loan and use it to buy (cash purchase, not finance) a reliable, efficient, used car -- if you truly need a car at all. If you can get to work by walking, bicycling or public transit, you can save thousands per year, and perhaps use that money to start you down the road to ""financial independence"".  Take a couple of hours and research this.  In the US, we tend to view cars as necessary, but this is not always true.  (Actually, it's true less than half the time.) Even if you cannot, or choose not to, live within bicycle distance of work, you can still reduce your commuting cost by not financing, and by driving a fuel efficient vehicle.  Ask yourself, ""Would you give up your expensive vehicle if it meant retiring years earlier?""  Maybe as many as ten years earlier."
Setting aside for the moment the very relevant issue of whether you need the full amount quickly, I'll just tackle comparing which option gives you to maximum amount of money (in terms of real dollars). The trick is, unless you think inflation will suddenly reverse itself or stop entirely (not likely), $50K today is worth a LOT more than $50K in 20 years. If you don't believe me, consider that just 30 years ago the average price for a mid-level new car was around $3k. When you grandfather says he got a burger for a nickel, he isn't talking about 2010 dollars.  So, how do you account for this? Well, the way financial people and project managers do it to estimate how much to pay today for $1 at some point in the future is through a net present value (NPV) calculation. You can find a calculator here. In your question, you gave some numbers for the payout, but not the lump sum prize amount. Going solely on what you have provided, I calculate that you should take the lump sum if it is greater than $766,189.96 which is the net present value of 20 years of $50K Payments assuming 3% annual inflation, which is fairly a fairly reasonable number given history. However, if you think the out-of-control Gov't spending is going to send inflation through the roof (possible, but not a given), then you almost certainly would want the lump sum. I suppose in that scenario you might want the lump sum anyway because if the Govt starts filching on their obligations, doing it to a small number of lottery winners might be politically more popular than cutting other programs that affect a large number of voters.
"I was afraid of this. If you are using 12 P/Y and 12 C/Y, then your interest rate should not be divided by 12. Also, you should use ""END"" as this means monthly payments are made at the end of the month - a usual default."
Here is a simple way to analyze the situation. Go to your bank or credit union website and use their loan calculator with their current real interest rates and down payment requirements. Enter the rate, and number of years. Enter different values for the loan amount to get the monthly payment to the level you want ($400). Today for my credit union, the max loan would be about $9,500. Keep in mind there may be taxes, registration fees, and down payment on top of this. Jump ahead two years. The loan is paid off, the car is owned free and clear. You will be able to sell it and get some money in your pocket.  If you go for a longer term loan to keep the payments under your goal the issue is that in two years you might be upside down on the loan. The car may be worth less than the remaining balance on the loan. Your equity would be negative.
"You're welcome to throw in the towel and stop paying any time you want.  You'll just suffer the consequences of doing so. It sounds like you're concerned about losing your job ""in the next few years.""  What are you doing to stem this off?  Are you building up a side income?  Are you building up portable skills -- ones that can be used anywhere?  If you think you have a few years left, use them.  Build something up.  You may be able to recover more quickly, or last longer until you find a new job. Some of my blogging friends have been at it about as long as I have, and they're in high-five, low-six figures now.  For blogging.  Some did it even faster.  All it takes is time.  Your expenses for starting a blog are $10/month plus cutting out two hours of TV / drinking / anything else consumer-ish to learn more about your favorite interest, write about it, and interact with the online community. That's just one idea.  Season to taste or choose a different meal altogether. Are you frugal?  Are you looking for ways to cut expenses?  If you can find extra money to save a little bit more and knock out just one of those debts (say, the car), you'll be able to throw that payment at the student loan.  Then they'll both be gone, and you can save up a cushion for yourself faster. I just think it's a little weak to give up when you're not really in trouble yet.  You're tight, but you can get through that."
I agree with the Dave Ramsey method as well. If you don't have $1k in the bank already, do that.  Total up the smaller debts and the best buy card.  if they are $4k all together, then pay them off.  Don't get caught up in keeping the smaller one around because they are at zero percent.  If they exceed $4k, then payoff the interest bomb best buy card, then pay off the smaller ones, starting with the smaller balance.  That is the only tweak I will make here.  Dropping any amount into the Citi balance is pointless because it only reduces the amount, not the total number of hands reaching into your bank account.
I had a car loan through GMAC and extra money was applied to future payments.   At one point, I received a statement telling me I had 15 months until my next payment was due because I had not marked extra payments as going to principal.
"There's a loophole that could enable you to have it both ways. Start taking it out as soon as you are eligible. e.g. at age 62. If you decide you want more, starting at age 65, you can ""start fresh"" (at a higher level) by repaying what you took out between ages 62-64 at face value. Essentially, you can take out an interest-free loan for those years.  Or so the experts at Agora Financial have told me."
"As documented in MyFICO (http://www.myfico.com/credit-education/whats-in-your-credit-score/), there are several factors that affect credit scores. Payment history (35%) The first thing any lender wants to know is whether you've paid past credit accounts on time. This is one of the most important factors in a FICO® Score. As @Ben Miller mentioned, checking your credit report to determine whether or not late payments were reported to credit bureaus will give you a sense of whether or not this was effected. You mentioned several bounced payments, which certainly could have caused this. This would be my largest concern with a closed account, is to investigate why and what was reported to the bureaus, and in turn, other lenders. Also, since this has the highest impact on credit scores (35%), it's arguably, the most important. This is further detailed here, which details the public record and late payment effect on your score. Amounts owed (30%) Having credit accounts and owing money on them does not necessarily mean you are a high-risk borrower with a low FICO® Score....However, when a high percentage of a person's available credit is been used, this can indicate that a person is overextended, and is more likely to make late or missed payments. Given that this card was closed, whatever your credit limit was is now no longer added into your total credit limit. However, your utilization on that card is gone (assuming it gets paid off), depending on any other credit lines, and since you reported ""heavy use"" that could be a positive impact, though likely not. Length of credit history (15%) In general, a longer credit history will increase your FICO® Scores. However, even people who haven't been using credit long may have high FICO Scores, depending on how the rest of the credit report looks. Depending how old your card was, and particularly since this was your only credit card, it will likely impact your average age of credit lines, depending on other lines of credit (loans etc) you have open. This accounts for about 15% of your score, so not as large of an impact as the first two.
"I always hesitate to provide an answer to ""how does this affect my credit score?"" questions, because the credit agencies do not publish their formulas and the formulas do change over time. And many others have done more reverse engineering than I to figure out what factors do affect the scores. To some extent, there is no way to know other than to get your credit score and track it over time. (The credit report will tell you what the largest negative factors are.) However, let me make my prediction. You have credit, you aren't using a large percentage of it, and don't have defaults/late payments. So, yes, I think it would help your credit score and would build a history of credit. Since this is so unusual, this is just an educated guess."
Credit scoring has changed recently and the answer to this question will have slightly changed. While most points made here are true: But now (as of July 2017) it is possible having a large available credit balance can negatively effect your credit score directly:  ... VantageScore will now mark a borrower negatively for having   excessively large credit card limits, on the theory that the person   could run up a high credit card debt quickly. Those who have prime   credit scores may be hurt the most, since they are most likely to have   multiple cards open. But those who like to play the credit card   rewards program points game could be affected as well. source
Credit scoring has changed since the time of this question (July 2017) and it is now possible that having a high available credit balance can negatively affect your credit score. ... VantageScore will now mark a borrower negatively for having   excessively large credit card limits, on the theory that the person   could run up a high credit card debt quickly. Those who have prime   credit scores may be hurt the most, since they are most likely to have   multiple cards open. But those who like to play the credit card   rewards program points game could be affected as well. source
"Credit Scores / Rates are based on sometimes simple and sometimes quite complex Statistical Models (Generalised Linear Models, Neural Networks, Regression and Classification Trees, Mixture Models, etc).This depends on whether it is something more general like FICO or what large banks develop in-house. In any case, there are many legislation-dependent factors (Qualitative such as education, occupation security, sex, etc, payment history; or Quantitative such as age, liquidity and leverage ratios, etc). Now, most model that are used today are propriety and closely held trade secrets. The most important reason for this is actually because of the databases that feed the models. More better quality data is what makes the real difference ... although at the cutting-edge, the mathematicians/statisticians/computer scientists that design the algorithms will make a huge difference. Now, back to the main thing: The Credit Score/Rate is meant to be used only as an indicator for representing the Probability of Default (""How likely you are to default on your obligation towards me?"" is what it means and that is largely based upon ""Has company/he/she honoured his financial obligations?"") of a certain consumer. In more sophisticated models, they may also use your industry sector or occupational and financial security to predict the future behaviour. However, this ""Credit Score"" has meaning only in relation to a ""Credit Limit"" (""Can you pay back my $X?""). The credit limit on the other hand is defined by your income level, debt/asset, etc). As a credit risk analyst, whether we are dealing with large corporate loans, mortgages, personal loans, etc), the principles are the same: One thing to consider is that factors considered in determining a credit score usually do not have a simple linear relationship. Consumer Profile types such as utilisation rate are a lot more about EFFECT than CAUSE: The most important thing is to honour your obligations, whether you pay before or after you spend makes little difference, so long as you pay in full and prior to maturity, your rate/score will improve with time. Financial Institutions have many ways to make money of everyone. Some, such as interest rates and fees are directly charged to you and some are charged to your goods-and-services providers.
Credit scores in the U.S. are entirely based on information contained in your credit report.  The details of your credit card transactions, such as where your individual purchases are from, the amount of individual purchases, refunds, chargebacks (successful or failed), etc. do not appear on your credit report.  Therefore, they can have no impact on your credit score. According to creditsavvy.com.au, credit scores in Australia are based on similar information: the information in your credit history, credit profile, and credit applications.  I don't see anything that would suggest that the details of your transactions would affect your credit score.