Student loan repayment... sell the car? grind it out? your advice is appreciated.

[4444]

Originally Posted by Nlkko

You guys really advising him to "invest" first before paying off his debt? There is NO guaranteed investment outside of GIC and a Savings Account. You can and may very well lose money investing.

Pay off your debt, invest when you're balance sheet is clean. Ditch the $17,000 car, which by the way, is a depreciating asset.

You are sitting on 55k debt AND paying interest monthly with the power to instantly pay off 70% and enough income to pay off your debt within a year easy. You don't need a 3 year plan.

Be debt-free first and invest only after.

this is and isn't true.

if he just plops $22K in the stock market and adds nothing to it, that's a stupidly risky move.

if he's already putting in $500 a month into a wise, diversified (60/40?) portfolio, i'd agree entirely with you as this portfolio will, on average, gain 7% per year.

doing what you suggest is only wise if the person doing it is financially literate, disciplined, and wise. usually this comes at a slightly later stage of life, i find (and that's not a knock on anyone)

[mr_chin]

Originally Posted by vudooca

Current Plan (rough)
Here is the rough payment plan table i made if i just decided to grind it out:

Month / $inject / Student loan /floating 5.35 per year /thus by month /thus by daily
Current 0 56393.66 3017.06081 251.4217342 8.267188418
May-15 22000 34393.66 1840.06081 153.3384008 5.042036066
Jun-15 4000 30393.66 1626.06081 135.5050675 4.455644729
Jul-15 2500 27893.66 1492.31081 124.3592342 4.089150144
Aug-15 2500 25393.66 1358.56081 113.2134008 3.722655558
Sep-15 2500 22893.66 1224.81081 102.0675675 3.356160973
Oct-15 4000 18893.66 1010.81081 84.23423417 2.769769636
Nov-15 2500 16393.66 877.06081 73.08840083 2.40327505
Dec-15 2500 13893.66 743.31081 61.9425675 2.036780465
Jan-16 2500 11393.66 609.56081 50.79673417 1.670285879
Feb-16 4000 7393.66 395.56081 32.96340083 1.083894543
Mar-16 2500 4893.66 261.81081 21.8175675 0.717399957
Apr-16 2500 2393.66 128.06081 10.67173417 0.350905372
May-16 2393 0 0 0 0

Thank you for taking your time in reading at least. I hope someone can chime in soon.

By keeping your 300zx, you're technically putting more than $250 in interest. If you think about it, you're paying

$250 in interest
$200ish? in gas for a needless vehicle
$200ish? for insurance for a needless vehicle
possible maintenance for that vehicle.
That's almost $800ish every month.

I would replace that 22k you plan on dishing out with the money you get from selling your car. The interest, on top of that vehicle is eating away at you like cancer.

Now redo your plan with your car sold and the money that you would pay in gas, insurance and maintenance into it, and see how soon you'll pay off this loan.

Debt is the #1 most devastating thing to your finance. Unless the debt is rewarded once paid off, like a mortgage or a loan for a business, you should get rid of it ASAP.

[Jmac]

I assume he will still need a vehicle to get to and from work, unless you can point out the Skytrain route in Fort St. John.

Also, selling the car for $17k (if he can even find a buyer around FSJ at $17k) wouldn't bring his interest payments from $251 to $0.

If he sells the car for $15k, buys a reliable, fuel efficient car for $5k, that allows him to put $10k towards his debt, +$100/month from fuel savings, and possibly a little extra from maintenance.

[radioman]

Originally Posted by Jmac

I assume he will still need a vehicle to get to and from work, unless you can point out the Skytrain route in Fort St. John.

Also, selling the car for $17k (if he can even find a buyer around FSJ at $17k) wouldn't bring his interest payments from $251 to $0.

If he sells the car for $15k, buys a reliable, fuel efficient car for $5k, that allows him to put $10k towards his debt, +$100/month from fuel savings, and possibly a little extra from maintenance.

OP already has a 2nd vehicle.

"I also own a 97 pathfinder which is probably worth 2000"

Originally Posted by mr_chin

By keeping your 300zx, you're technically putting more than $250 in interest. If you think about it, you're paying

$250 in interest
$200ish? in gas for a needless vehicle
$200ish? for insurance for a needless vehicle
possible maintenance for that vehicle.
That's almost $800ish every month.

Your monthly expenditures for his vehicle almost totaled his rough cost of money he would spend a month to survive. He stated he already included car insurance etc into it. You might be over exaggerating his monthly ins/gas costs.

[Jmac]

Originally Posted by radioman

OP already has a 2nd vehicle.

"I also own a 97 pathfinder which is probably worth 2000"

Ah, I missed that. Still, a '97 Pathfinder isn't going to be much better in the fuel cost or maintenance cost department.

[Spoon]

The Pathfinder's likely a winter beater. At least that's what I'd assume if it's only worth 2k.

Anyhow, his Z's going to be a tough sell. Sentimental value of 17k does not mean 17k market value. Being a 20 yo car and highly modified, the demand will be slim to none. Might as well keep it till it dies, cuz what he'll get and what he wants will be so far apart he'll fall into depression.

[will068]

With your aggressive plan, even if you do not inject that 22k, have your ever considered a balance transfer from your CC juggling it out with a Bank Line of Credit ?

Now, with me much older than you, I do this when there is an easy opportunity for me for investing:

Since CC Balance Transfers here in Canada at the moment from most companies are for 6 months with 0% interest and a 1% fee, I use this if I see an opportunity for me to make 5- 6 percent minimum safely (from my analysis anyways) without liquidating some of my other securities where it has not reached my end price point yet

- In your case, suppose you take out 10k from the CC Balance Transfer - inject the 10k in the Student Loan Account

- Pay off your Student Loan Account Aggressively

- Pay off the minimum from the monthly CC Balance Transfer that you are obligated to

- After 6 months when the 10k is due - pay this off with your Line of Credit

- Re-apply for another CC Balance Transfer from the same card (it takes a 5 min phone call)

- Take out 10k from your CC Balance Transfer and pay off the Line of Credit (also pay off the $10-$30 interest incurred in the Line of Credit obviously)

- Repeat the CC Balance Transfer / Line of Credit Juggling until the Student Loan is repaid

Anyways, this is just another way to take advantage of the super low interest rates.

[underscore]

I'd keep the car and split the 22k, keep 11k in the emergency fund and put the other 11k onto the loan. That'll not only pay it off faster but save you money on interest. Past that I'd pay off the loan according to your plan until it's gone.

IMO selling the car is only really a benefit if you wouldn't end up wanting to replace it later on. If you sell it now for $15k but end up spending $30k in 3 years to build another one you're not really benefiting yourself by selling it.

[mr_chin]

Fuck it... send the debt to collection and take the credit hit. It's not THAT bad.

[6793026]

If you need emergency fund, just go to the bank to get a line of credit.