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4% rate, i would either pay it off, or look into transferring it to a local credit union for about 1.5%-2% if you do a term < 36 months. 4% is very high to be paying if you've got cash on hand above and beyond at least a 6 month emergency fund amount.
I am with a credit union. The only reason my interest is what it is...it started out a little over 6%...is that I do still have ONE black mark on my credit report. It's not even MY bill but I haven't been able to get it resolved yet. I refinanced to get it down to 4%. I do have over six months in emergency money but I wouldn't have if I paid the car off. OTOH it wouldn't take long to replace the money.
I am with a credit union. The only reason my interest is what it is...it started out a little over 6%...is that I do still have ONE black mark on my credit report. It's not even MY bill but I haven't been able to get it resolved yet. I refinanced to get it down to 4%. I do have over six months in emergency money but I wouldn't have if I paid the car off. OTOH it wouldn't take long to replace the money.
how many months EF would you have if you paid it off? and how secure is your job? if you're talking a payoff would bring you to 4 months EF, and you have a fairly secure type of job, I'd pay it off. like i said, at best, in a good money market account you can get about 1% interest. so holding on to money you're paying 4% interest and earning 1%. the net being 3% is greater than I personally would do. I'm not paying my auto loan off early because it's 1.49% so I don't really see the value of reducing my cash on hand that's earning 1.05% for a 0.45% spread. basically, I'm paying about $10/yr to have about $9,000 more in my savings account (or, use it to pay down my more expensive student loans, which is what I am doing, just gradually not in one lump).
how many months EF would you have if you paid it off? and how secure is your job? if you're talking a payoff would bring you to 4 months EF, and you have a fairly secure type of job, I'd pay it off. like i said, at best, in a good money market account you can get about 1% interest. so holding on to money you're paying 4% interest and earning 1%. the net being 3% is greater than I personally would do. I'm not paying my auto loan off early because it's 1.49% so I don't really see the value of reducing my cash on hand that's earning 1.05% for a 0.45% spread. basically, I'm paying about $10/yr to have about $9,000 more in my savings account (or, use it to pay down my more expensive student loans, which is what I am doing, just gradually not in one lump).
I would have about four months EF left after a payoff. I'd say my job is about 99% secure. I'd have to do something really bad to get fired and I like my job so I'm not about to quit. That is NOT to say that something 'bad' could happen where I'd be physically/mentally unable to work anymore. Perish the thought!
Lucky you to have such a low interest rate! And I'm glad I went to college when I could afford to pay as I went. I feel so sorry for you younger people saddled with that debt and just starting out.
I would have about four months EF left after a payoff. I'd say my job is about 99% secure. I'd have to do something really bad to get fired and I like my job so I'm not about to quit. That is NOT to say that something 'bad' could happen where I'd be physically/mentally unable to work anymore. Perish the thought!
Lucky you to have such a low interest rate! And I'm glad I went to college when I could afford to pay as I went. I feel so sorry for you younger people saddled with that debt and just starting out.
well, 4 months, i would pay it off then. lots of people view their jobs as secure, but i guess i was asking more about what industry do you work in and such. my wife is a pharmacist. she basically has to screw up to get fired. they don't really close locations or downsize. my job is relatively secure, but my company could decide to consolidate departments and easily eliminate people if they wanted to. so though i probably wouldn't get axed, i could. so i keep a decent emergency fund.
as for student loans...my federal loans are 1.675% and my private loans are 3%, so i don't really sweat it. i pay extra on the private loans.
However, if you are still on the fence, how about you pay off $4000 of the car loan, so that you have an additional $1000 to put into your emergency fund. Then you have 4.25 more car payments, then you are done. Also the interest will be much cheaper than the $20/mo you have been paying because the interest is based upon the amount owed.
well, 4 months, i would pay it off then. lots of people view their jobs as secure, but i guess i was asking more about what industry do you work in and such. my wife is a pharmacist. she basically has to screw up to get fired. they don't really close locations or downsize. my job is relatively secure, but my company could decide to consolidate departments and easily eliminate people if they wanted to. so though i probably wouldn't get axed, i could. so i keep a decent emergency fund.
as for student loans...my federal loans are 1.675% and my private loans are 3%, so i don't really sweat it. i pay extra on the private loans.
I work for Walmart and been there going on four years. I don't think I have to worry about them closing or downsizing. lol I'd have to screw up really bad...thievery, underage liquor/tobacco sales, etc...to get fired. I've seen it happen but it's rare.
I've been unemployed in the past for as long as 9 months so I really like to keep about a years worth on hand. Sometimes 'emergency' stuff might come up but nothing really bad...I would hope.
However, if you are still on the fence, how about you pay off $4000 of the car loan, so that you have an additional $1000 to put into your emergency fund. Then you have 4.25 more car payments, then you are done. Also the interest will be much cheaper than the $20/mo you have been paying because the interest is based upon the amount owed.
I thought about that too. Or pay off half at least. I still haven't called the bank...too much going on and I forget about it.
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