Quote:
Originally Posted by War Beagle
Of course I've done significantly better than 2.84% since I've been investing, which is one of the reasons I asked this question. All of my investing has been focused on long-term.
My question basically comes down to opportunity cost of paying off the loan versus paying the installments with a relatively low interest rate and having more cash on hand. You are right that long-term I will make more than the interest rate by investing. But with the economy slowing down, it could be a while before there are significant gains again. So yes, while investing is long-term, the auto loan is more of a short-term consideration.
The more I think about it, the more I'm inclined to just pay it off. Given the recent market, I dont see that money as doing a whole lot as an investment during the amount of time left on the loan. Most likely I will make more on saved interest than gains in investing from that same period.
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There's your answer.
Simple.
It's not what we can advise, or what markets are doing,
it's what makes YOU feel comfortable .
We are carrying some lower interest debt on house Reno's. I'd feel better paying it off, but it's so low we don't care to at this point.
Maybe next year.
With the slowdown and possibly a recession looking, I'd still rather add to savings than to pay it off.
So for the next year and a half or two, well continue to make the payment as agreed.
If you feel better paying it off, go ahead.
You'll sleep better what ever YOU decided to do.
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