Pay it off?

I’ve been doing some figuring. I owe about 11k on my 2019. I financed longer than i normally would just in case, i have excellent credit and got a 4.74 percent int rate. That comes out to paying about 1.45 int per day
Int rate /365=x
X times principle =per day int.

Wouldn’t it make more sense to pull 11k from my savings that earns .000002 percent and pay the truck off instead of paying any more int?

 

To me it always makes sense to not pay interest if I can get away with it. That being said, is that all of your savings and is that savings your only safety net?

 

If the money pulled is making less interest then the interest paid for your Taco and it financially isn't an issue, pay it off.

 

It would be about 20% of cash (in bank) savings.

 

Rates must have went up because 4.74 sucks for even 60 months

I'm a firm believer is all debt sucks, but people will tell you otherwise on here because they all seem to be putting that extra money to work. They say things like they're investing it, but really they're just wasting it at Applebee's and hot tub payments.

If it's not cutting into your emergency fund/savings to the point of zero, pay it off.

 

future is never predictable. somebody once told me cash is King...

but it's never quite so simple.

 

I would personally pay that sucker off then.

 

what he said...

 

I agree. Pay it off if financially other variables are good. Don’t know all of OP finances and don’t need to know, but I wouldn’t take that much out of my savings unless there was a substantial amount there or other safety nets in place

 

Your rate is too high.
When my loans are closer to the inflation rate (2%ish) I like to keep them.
In this case I would definitely pay it off.

 

I agree. What if something came up that you needed access to All your savings...

 

You should look into a better savings account as well. There are some that are as high at 2% right now which is pretty good for money you can access if you needed it right away. But yeah no payment is awesome.

 

It's also worth noting that your credit score will likely drop after you pay it off. Mine dropped 20 points after paying my truck off in October. If you live for the score this might hurt, but zero fucks given here

 

If you have any other credit that has a higher rate pay it off first and work down to the lowest credit rate, if no other credit and you can pay off and have an emergency fund left over then pay it off.

 

I was in the same position right at the end of November. I went ahead and paid off my 2019 Tacoma. The monthly payments are going back into my savings to replace the funds and I have the title to my truck. I think this makes the most sense.

 

yep. for the machine to give you a thumbs up (credit rating) you must play by their rules. those rules are not about getting it paid. those rules are about making you a permanent source of monthly revenue. break their game and take a hit.

 

What interest rate would you get if you borrowed from your bank with a secured loan againest your savings account?

 

it makes sense though. if i'm a creditor i award the highest score to someone who can demonstrably show me they can handle monthly debt obligations. someone having no debt doesn't show me that. it shows they're better than most with their money, but i want to see them make payments on time and not fall behind.

with that said, if you have relatively low debt, long credit history and on-time payments, your score should be 800 or close to it. dropping 20 points or something is trivial and won't affect have a significant impact on any future loan you apply for.

 

if a corp wants to lend you money, it is a bad deal. pay it off and in time it snowballs to where you can pay cash for anything and give the parasites the finger.

 

it's all about consistency, not rocking any boats, not getting any attention, not requiring questions answered or investigations. pay the bills scheduled on due dates, don't pay early, but if you do, like the q in this thread, then look at the numbers well off into the future and know you are still gambling. creditors look at your debt as a contract with monthly requirements and paying early alters the deal and you take the hit. they are ok with it as long as you take the hit. they are there to take your money however it goes.