Pay off the car or put a dent in student loan?

musclefan21

Well-Known Member
Established Member
Joined
Mar 21, 2007
Messages
10,880
Location
USA
I have a chunk of change that will pay my car off, or I can use that toward my student loans which will only put a dent in that. Which route would you take and why?

Thanks!
 

El_Joker

Member
Established Member
Joined
Jun 1, 2014
Messages
72
Location
Texas
Good question as I am in a similar position, just with payoff's flipped.

Depending how close the car is to its original payoff, I would be a little leary as it could cause a big hit to your credit score. If the car payment is noticeable, and the possibility of a credit hit isn't a concern, I'd lean toward paying off the car.
 

riche

Active Member
Established Member
Joined
Oct 24, 2004
Messages
190
Best thing to do would be to sell your car, take all the money you have and pay off the student loans and get completely out of debt. Then buy a car you can afford with cash even if you have to save up for a little while. But with no debt saving shouldn't be hard.
 

nickf2005

Well-Known Member
Established Member
Joined
Apr 8, 2012
Messages
2,309
Location
IN

SolarYellow

Sensei
Established Member
Premium Member
Joined
Jun 11, 2005
Messages
9,585
Location
Scranton, PA
Good question as I am in a similar position, just with payoff's flipped.

Depending how close the car is to its original payoff, I would be a little leary as it could cause a big hit to your credit score. If the car payment is noticeable, and the possibility of a credit hit isn't a concern, I'd lean toward paying off the car.

Odd. When I paid off my vehicle roughly 9 months early I noticed a nigher score the following month or was it the second month. Either way I was pleasantly surprised.
 

tistan

Well-Known Member
Established Member
Joined
Feb 20, 2005
Messages
5,976
Location
savannah
Odd. When I paid off my vehicle roughly 9 months early I noticed a nigher score the following month or was it the second month. Either way I was pleasantly surprised.
I think that paying off everything will hurt credit is a lie from the credit companies. I paid off everything is 2008, and I also closed all credit accounts, which they also say is a no no. My credit score went from 720s to 780s.
 

El_Joker

Member
Established Member
Joined
Jun 1, 2014
Messages
72
Location
Texas
I think that paying off everything will hurt credit is a lie from the credit companies.

From what I have seen it is very individual based. An example is comparing someone without much established credit to someone with 25 years; likely two different scenarios.

When I paid my first auto loan off I did it with about 10 months left and had no impact. If I paid a loan off with much more than 40% time left, I would expect a utilization hit in my situation.
 

cbr repsol

Well-Known Member
Established Member
Joined
Jun 21, 2006
Messages
5,487
Location
Victorville,Ca
So how is selling his car gonna help him in the mean time to save? If op goes to school right down the street and his work is around the other corner I could see that working. Fortunately we have 4 cars but there is no way we could go with no car.
If you love your car and the miles aren’t to high I would consider keeping it and paying it off. Since the car loan is most likely higher interest.
 

Users who are viewing this thread



Top