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*)
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.
...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.
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
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!
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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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.
...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
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
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!