AcesandEights
Well-Known Member
- First Name
- Aces
- Joined
- Aug 19, 2021
- Threads
- 35
- Messages
- 3,869
- Reaction score
- 7,601
- Location
- So. Oregon
- Vehicle(s)
- 2024 Toyota 4Runner
- Occupation
- I'm often occupied, by many things, often at the same time
Do both. Build an emergency fund, reduce/eliminate debt. Any interest you pay is interest you're not earning. If interest rates go down and you can refi at that lower rate, it's an effective way to eliminate total interest paid, and total payments made. That then frees up that money for emergencies (in addition to the emergency fund), and allows you to maximize interest earned by investing larger amounts of money earlier.
It's just another way of looking at things. Do you want to pay interest, any amount of interest, for 36 months or 24 months? If you look at the total amount of money spent to finance something over the life of the loan, you may pay less overall if you pay it off earlier. (Generalization) Most people don't use that lower payment to then invest the difference. They buy something else. If someone can free up cash and use it to their advantage, cool.
You may be able to use that money somewhere else, and if the interest rate/return on that is high enough to be cost-effective, good. If it isn't, then get out from under it.
It's just another way of looking at things. Do you want to pay interest, any amount of interest, for 36 months or 24 months? If you look at the total amount of money spent to finance something over the life of the loan, you may pay less overall if you pay it off earlier. (Generalization) Most people don't use that lower payment to then invest the difference. They buy something else. If someone can free up cash and use it to their advantage, cool.
You may be able to use that money somewhere else, and if the interest rate/return on that is high enough to be cost-effective, good. If it isn't, then get out from under it.
Sponsored
