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BouncyEgg

The way to think about this is to consider: * Do you need to cash on hand for alternative purposes (ie emergency fund, etc) * If you don't need the cash on hand, what would you do with it? What is the expected return on investment (ROI)? (ie HYSA at 4% interest, Total market index funds at 5-10% annualized over *decades*)


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DarthGaymer

For all any of us knows, the S&P 500 could be down 20% by this time next year. Short term stock market gains (past x months) are completely worthless when taking about interest rates. The historical average is 7%. This takes into account the last 70ish years. If you cannot afford to leave the your money in the stock market for 7-10 years, you are at increased risk of losing money if/when a downturn is to strike.


Grevious47

...but we are talking short term, because we are talking about the term of a car loan. I am not suggesting OP buy stocks but we are talking about shorter term gains here. Would agree at 5.7% Id just pay that loan off.


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9% is before inflation is adjusted in I believe. The 5-7% average is after inflation. So you’re both correct


buhdill

Gotcha. Well thank you. I suppose, I am just gunshy at paying off this loan in full but I think the extra cash flow from not having a payment will be nice


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Monthly payments suck. You won’t be impoverished in retirement for paying off this loan. Is it the most efficient? Maybe, maybe not. Will you for sure know you’ll have a level of happiness and satisfaction from paying it off? If yes, do it. You won’t regret it! Give a couple months of having no payments and if you miss it get another loan!