REVscene Automotive Forum - View Single Post - Student loan repayment... sell the car? grind it out? your advice is appreciated.

lowside67 · 05-31-2015, 07:23 PM

The car part I'll leave to your own decision, it's your business.

But the $22k in the bank is a VERY simple decision. If you have any way you can make more than 5.25% on that money - ie investing it at 8%, it'd be better to do that as you will earn 8% and then pay 5.25% which leaves you 2.75% profit (for simple math). However, if you are just sitting it in a bank account earning 0% interest, or anything less than 5.25%, you are literally paying interest to borrow money you already have.

TLDR: If your $22k is in a savings account doing nothing, pay the loan off with every bit of that.

Mark

05-31-2015, 07:23 PM	#10
lowside67 Old School RS Join Date: May 2004 Location: Port Moody Posts: 4,641 Thanked 4,157 Times in 1,262 Posts Failed 130 Times in 80 Posts	The car part I'll leave to your own decision, it's your business. But the $22k in the bank is a VERY simple decision. If you have any way you can make more than 5.25% on that money - ie investing it at 8%, it'd be better to do that as you will earn 8% and then pay 5.25% which leaves you 2.75% profit (for simple math). However, if you are just sitting it in a bank account earning 0% interest, or anything less than 5.25%, you are literally paying interest to borrow money you already have. TLDR: If your $22k is in a savings account doing nothing, pay the loan off with every bit of that. Mark __________________ I'm old now - boring street cars and sweet race cars.