Finance guys I think I know but want loan advice (1 Viewer)

[belljr]

Scenario

I have 1 auto loan with a remaining balance of 16200 at 3.99%. Pmt is $600 a month but I pay ahead. I think I am 8 months ahead

Second loan balance 16800 at 5.9%. Min pmt is 425. Always pay ahead. I think I'm 6 months or so.

I'd have to look up exactly I'm ahead.

I have a HELOC at 8.9% with no balance.

Is it better to keep the separate loans? Or combine them into my HELOC and basically combine the payments?

So instead of 600-700 a month per loan pay the 1200-1400 on the one

Tia

 

[Instinctive]

Scenario

I have 1 auto loan with a remaining balance of 16200 at 3.99%. Pmt is $600 a month but I pay ahead. I think I am 8 months ahead

Second loan balance 16800 at 5.9%. Min pmt is 425. Always pay ahead. I think I'm 6 months or so.

I'd have to look up exactly I'm ahead.

I have a HELOC at 8.9% with no balance.

Is it better to keep the separate loans? Or combine them into my HELOC and basically combine the payments?

So instead of 600-700 a month per loan pay the 1200-1400 on the one

Tia

Let's say you are gonna pay $1200 regardless.

It would be best to pay the minimum possible on the 3.99% loan and put all your remaining into the 5.9% one.

Combining either of them into an 8.9% loan is like lighting money on fire.

 

[Mitchie]

Why would you want to move money into a loan with a higher interest rate? Am I missing something here?

 

[belljr]

Scenario

I have 1 auto loan with a remaining balance of 16200 at 3.99%. Pmt is $600 a month but I pay ahead. I think I am 8 months ahead

Second loan balance 16800 at 5.9%. Min pmt is 425. Always pay ahead. I think I'm 6 months or so.

I'd have to look up exactly I'm ahead.

I have a HELOC at 8.9% with no balance.

Is it better to keep the separate loans? Or combine them into my HELOC and basically combine the payments?

So instead of 600-700 a month per loan pay the 1200-1400 on the one

Tia

Let's say you are gonna pay $1200 regardless.

It would be best to pay the minimum possible on the 3.99% loan and put all your remaining into the 5.9% one.

Combining either of them into an 8.9% loan is like lighting money on fire.

Yep that's pretty much what I've been doing.

And I was 99% sure I was correct but always question myself when it comes to finances because I don't have a deep knowledge of stocks, loans, retirement funds etc.

I mean I'm ok and not a complete dummy and I knew the 8.9 was obviously higher but wasn't sure if there was some weird one loan with slightly higher is actually better than 2 slightly lower non sense I never heard of

 

[tommyGunZ]

Stop paying anything in advance on the 3.99, just pay the minimum each month. Put every other discretionary dollar that you can afford each month to pay the 5.9% loan off as early as possible. When you're done paying off the 5.9% loan, start maxing on the 3.99% loan.

 

[NutterButter]

Pay the min on both loans and put the rest into crypto.

 

[belljr]

Stop paying anything in advance on the 3.99, just pay the minimum each month. Put every other discretionary dollar that you can afford each month to pay the 5.9% loan off as early as possible. When you're done paying off the 5.9% loan, start maxing on the 3.99% loan.

Thanks that's pretty much what I've been doing once I got ahead. The reason I was ahead more on the 3.99 is it was my only loan for about a year before I had to get the second one

 

[stbugs]

Stop paying anything in advance on the 3.99, just pay the minimum each month. Put every other discretionary dollar that you can afford each month to pay the 5.9% loan off as early as possible. When you're done paying off the 5.9% loan, start maxing on the 3.99% loan.

Thanks that's pretty much what I've been doing once I got ahead. The reason I was ahead more on the 3.99 is it was my only loan for about a year before I had to get the second one

When you said you are ahead on payments, I hope that means you are paying the extra monthly amount to principal and not paying future payments. If so, everyone else has it covered. Don’t touch the HELOC as you’d just be paying way more for the convenience of one payment, which you can save time already by automating payments. Also, pay down the 6% one first and don’t pay extra on the 4% until the 6% loan is paid off.