| Which one should I pay off first Car loan or Equity Line? |
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diving4lobsters
New Poster
Cash: $ 0.45
Posts: 2
Joined: 15 May 2006
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| Which one should I pay off first Car loan or Equity Line? |
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Thanks in advance for your advices:
Age: 34
Income: 85K/Year
Equity Line: 50k: 20 years @ 7.6% for Monthly 411/month
Car Loan: 20K: 5 years @ 7.6 for Monthly 422/month
Credit cards: 0k just finished paying 20k of credit cards!!
Savings: 0K
I am now targeting the next monster but not sure which one should I pick. Should I pay the car loan or equity line. I was thinking that the car loan should go out first since the equity is tax dectuble. Once I pay the car loan and could then send the money to the equity line. I am not sure.
My goal..become debt free within 5 years!!!
Please advice
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Mon May 15, 2006 3:01 pm |
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Kiaser
Senior Member
Cash: $ 43.05
Posts: 209
Joined: 12 Apr 2006
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| Re: Which one should I pay off first Car loan or Equity Line |
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quote:
Originally posted by diving4lobsters
Thanks in advance for your advices:
Age: 34
Income: 85K/Year
Equity Line: 50k: 20 years @ 7.6% for Monthly 411/month
Car Loan: 20K: 5 years @ 7.6 for Monthly 422/month
Credit cards: 0k just finished paying 20k of credit cards!!
Savings: 0K
I am now targeting the next monster but not sure which one should I pick. Should I pay the car loan or equity line. I was thinking that the car loan should go out first since the equity is tax dectuble. Once I pay the car loan and could then send the money to the equity line. I am not sure.
My goal..become debt free within 5 years!!!
Please advice
Definetely car loan because its non-deductible.
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Mon May 15, 2006 7:43 pm |
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diving4lobsters
New Poster
Cash: $ 0.45
Posts: 2
Joined: 15 May 2006
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Thanks,
I figure that i will take me about 2 years to pay-off my car loan..
moving forward!!
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Tue May 16, 2006 3:28 pm |
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JCook
Full Member
Cash: $ 11.20
Posts: 56
Joined: 24 Jan 2006
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Sell the car and get a cheap one and you can be paying on that equity line in a couple of months.
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Mon Jun 05, 2006 2:45 am |
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Kiaser
Senior Member
Cash: $ 43.05
Posts: 209
Joined: 12 Apr 2006
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| Re: Which one should I pay off first Car loan or Equity Line |
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That's a no-brainer, car loan.
You can always do something with equity lines, plus that is considered (hopefully) an appreciating asset.
Car is just consumer debt. If all it does is get from point a to point b then you may want to do a trade in and get a cheaper car. If it's for status value or pleasure, then keep it but pay it off before the equity line for sure.
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Tue Aug 08, 2006 12:20 am |
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mbd
Member
Cash: $ 4.60
Posts: 23
Joined: 31 Mar 2006
Location: Rogers, AR
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D4L,
Do you really have $0 in savings? If so, I would recommend building an emergency fund before you attack those other loans.
In your situation, I would put all extra funds toward that until I had 6 months of expenses saved up. Then pay off the car.
When paying off loans, I always consider the after-tax cost of the debt. If this is less than the after-tax income of investing these funds elsewhere, it may make sense to hold on to that debt.
I hope this is helpful to you.
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Tue Sep 05, 2006 12:36 am |
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