[Holly]

Pay it off then continue to put your car payment amount in savings

[John]

Pay it off. Savings won’t be paying you $500+ during the remainder of your car loan term.

[Lisa]

I would pay it off and just build savings back up.

[Allison]

Pay it off, unless it’s going to wipe out every bit of your savings.

[Patricia]

Yes yes, pay it off. Then use most of the car payment each month to build a good emergency fund!!!

[Annette]

Because we don’t know the whole of your financial health it is difficult to give good advice.

Due to my financial health I would pay off the car because I am allergic to interest on anything that is not making my money work for me.

Your financial health may dictate a different choice.

Edit – is there a penalty for early pay off?

[Meranda]

I would first make sure you have a small emergency fund to cover things like $1000 to start. Put whatever funds you have in surplus of that towards the car.

Once car is paid off use the monthly car payment and snow ball it to the next debt.

[Catrina]

Unless you have your savings in a high yield savings making more than the difference then pay it off.

[Kym]

First $1000 emergency fund then pay off all debt smallest to largest. If it is the smallest or only debt absolutely pay it off

[Jennifer]

Cancel GAP insurance also, if you had it. They’ll apply towards your loan and make it even less for you to pay!

[Roschelle]

Keep $1000 in savings and pay the rest in your car payment. Put as much towards it as you can after that.

You are almost there!! Congratulations!

[Sandra]

Pay it off. The sooner the better. You are paying g hundreds of dollars a year in interest!!

[Peggy]

I had a bad experience with this…. I paid the car off with the the lesser amount but they reported the difference as charged off.

Not nice!

[Grace]

I would pay it off now and put the payments you would have made into a savings account. I had a 15 year loan on my house taken out in 2015.

Four years ago I decided to take out a HELOC, with a 3 year payoff.

I paid my loan off in 2023, saving me over 1800.00 dollars a month.

The amount of money I saved by not paying interest is incredible.

[Maria]

Do you have an emergency fund to cover your day to day needs?
How long would it take for you to save up all that money again?

Is the interest rate on the loan higher or lower than your savings interest rate?

Note: many online banks like Amex, Discover, CapitalOne360, Ally, etc., offer high yield savings, FDIC insured.

Last time I checked, rates were around 4.10%

Do you pay a fee for early payoff of the loan?

These are things to think about. Other questions may pop up for you.

Consider the possibilities before taking action.

[Author]

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