Tips for Paying Off a Vehicle Loan

Video Transcript

"Tips for paying off a vehicle loan. In this day and age, cash is king. In many cases, although you might like to pay off that vehicle loan, you might want to take a look at your cash reserves and consider the advantages and the disadvantages. The disadvantage of paying the loan off is that once it's paid off, guess what, you still, you still have bills, obligations, other things that you have to take care of and if you've used up your emergency fund paying off that vehicle loan, you may not have the monthly payment, but you don't have the cash either and so, a lot of people get irritated because the vehicle loan might be at eight or ten or twelve, fourteen percent, whatever it might be and they go well, I need to save that interest by paying that loan off. Maybe you do, but if you don't have an emergency fund, trust me, it's better to have the cash than to have a paid for car because then, guess what you have to do if you need the money, you've got to sell the car or trying to go back out and get another loan against that car at the current age is not always a very easy thing. So, yo have to be careful in paying that thing off. Another way of paying off a vehicle loan, of course, is taking a home equity line or refinancing your home. Now, I wouldn't do that just for that purpose. If you have a lot of bills and you've dug yourself into a ditch and you want to take and mitigate that damage and get a lower interest rate, stretch out the term, make the payment more sufferable, not insufferable, but more sufferable, then you can think about refinancing your home, pulling cash out of the house, paying off the vehicle loan. Another way to pay a vehicle loan off is sell the house, sell the car. Pay it off. That will work too."