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Question for the Money Doctors

Question submitted on Sep 23, 2013.

Question

I have about $4700 in cash that is unused right now, away from my main accts. I also have a car loan with about $3900 left to pay, and a $200 monthly note. Would I be better off paying off my loan, which would free up the $200/month for other things/bills, etc., or just keep paying down as I do now?? Really can''t make up my mine, and would appreciate a fresh mind on this. Thank you!!!

Answer

That depends by what you mean by unused. If this is an amount IN EXCESS of emergency cash I would absolutely pay down the car. After all, you are paying non-tax deductible interest on this.

If you mean this is the ONLY extra cash you have why not pay down 2/3? That will let you pay it off much sooner but also have cash on hand for an emergency.


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