(Closed) Savings, car loan or student loan?

posted 5 years ago in Money
Post # 3
Member
12826 posts
Honey Beekeeper
  • Wedding: November 1999

Can you split it and put 1k towards the student loan and 1k in savings?  Ideally you should have 6 months of all living expenses saved up for an emergency, so I think your savings could use a bit of padding, but I also get paying loans.  Paying 1k towards loans would definitely be helpful and easier to pay off in a few months.

Congrats on your bonus!

Post # 4
Member
209 posts
Helper bee
  • Wedding: November 2012

I would put it in your savings where it would gain interest and just keep chugging away at that student loan normally

Post # 5
Member
533 posts
Busy bee

Goodbye student loan! 

Post # 6
Member
520 posts
Busy bee
  • Wedding: May 2012

I would also just save it – both of your interest rates are so low that I’d just keep paying them off a month at a time. 

Post # 7
Member
9609 posts
Buzzing Beekeeper
  • Wedding: May 2018

I would save it or put 1k towards savings and 1k towards your car loan, because its interest is higher than your student loan.

Post # 8
Member
1304 posts
Bumble bee
  • Wedding: September 2011

If you decide to pay off debt, PLEASE pay off the highest interest loan instead of the loan with the smallest balance.  You will save more money in interest that way.

Also, remember that bonuses are usually taxed at the top of your bracket.  Is $2k a gross or net amount?

Post # 9
Member
341 posts
Helper bee
  • Wedding: September 2012

I would pay off one of the loans. You have enought “padding” in your savings account that you should work on getting the other loans paid off.  But like PP said pay off the one with the highest intrest.

Post # 10
Member
365 posts
Helper bee

I would split it up… $1k in savings and $1k towards the car loan. I know it’s tempting to knock out that lower balance loan, but you’ll end up paying more in the end.

Post # 11
Member
868 posts
Busy bee
  • Wedding: July 2013

either all of it saved or split it between savings + highest interest rate loan

Post # 12
Member
10563 posts
Sugar Beekeeper
  • Wedding: January 2011

Here you can find high interest savings accounts for 2%.  I would stick it there, as it would be making more interest than either of your loans.  Then you can use it to pay off the minimum each month.  I would keep that money set aside for your debt though, then if the interest rate ever becomes higher than the HISA you can pay it off.

Post # 13
Member
5978 posts
Bee Keeper

Car loan definitely. Student loan interest is tax deductible while your car loan interest is not.

Post # 14
Member
3618 posts
Sugar bee
  • Wedding: November 2011

My priority would be to pay down the loans, with the car loan being the top priority. At least your student loan interest is a tax deduction.

Post # 15
Member
752 posts
Busy bee
  • Wedding: May 2013

You always pay towards the highest interst rate first, once you have a padded savings account. 

Post # 16
Member
11327 posts
Sugar Beekeeper
  • Wedding: February 2011

I’d put it in savings. 3k is not a ton to have in savings and having an emergency fund is important (to me, anyways). Plus, you have AMAZING interest rates. Seriously. I’m jealous.

The topic ‘Savings, car loan or student loan?’ is closed to new replies.

Find Amazing Vendors