Post # 1
I work for a company that gives a quartly bonus and I will be getting it soon…my fiance and I have discussed what to do with it and I cant decide so people give me some thoughts! lol
My bonus will be right at $2k. I have no credeit card debt but I do have a car loan for $20k at 0.9% and several student loans totalling around $30k. My student loans have an interest rate of 0.39% due to the bonus rate deductions I got for doing auto pay, making so many payments on time. One of my student loans only has $2k left on the balance so it would be kinda nice to get rid of that one. My personal savings currently has about $3k in it. I have no other debt besides monthly expenses. My question is…should I put the bonus money into savings for an emergency, pay it toward my car loan or my student loan?
My fiance votes for paying off that one student loan while I feel like it may be best just to put it in savings..just in case.
Post # 3
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
I would put it in your savings where it would gain interest and just keep chugging away at that student loan normally
Post # 6
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
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
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
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
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
either all of it saved or split it between savings + highest interest rate loan
Post # 12
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
Car loan definitely. Student loan interest is tax deductible while your car loan interest is not.
Post # 14
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
You always pay towards the highest interst rate first, once you have a padded savings account.
Post # 16
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.