Is it a smart move to pay off my car loan if there is $9500 remaining?

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I have already made about $3000 in payments. I would like to sell the car, but am not sure if paying the balance to the bank first is smart, or should I just try to sell it via craigslist and THEN pay the bank off?

5 replies on “Is it a smart move to pay off my car loan if there is $9500 remaining?”

Either way you are going to have to pay the amount owed to the bank.

If you have the money to pay it off you need to pay it off now.
The pay off today will be less than if you continue making the payments or pay it off in 6 months. If you pay it off today you will not have to pay all the interest until the end of the loan.

if you have the money now then pay it first. your going to save on intrest payments. if you wait you will have to still make the monthly payments and intrest on the car. plus going through craigslist as oppossed to a dealer that car is in your lein holders name and cant sell without tittle. i wouldnt buy a car off the street without a tittle also if the person who wants to buy does a tittle check they will see thats theres a lein on the car which in lamens terms means you dont own therefore cant sell. pay it off

It’s almost always a smart move to pay off your car loan if you have the funds. The only reason NOT to pay off your loan is if you are making more interest (profit) on your money than the bank is charging you. Realistically, this is only a possibility if you are paying under 5% interest on the loan.

Also, make sure that there is no penalty for early payoff (there shouldn’t be). That could change the equation somewhat.

It seems that most loans have been hard to get in this econonmy. The online places are good and often easier to quailify sometimes.

Ive been told this site is good

$3000 in payments doesn’t say how much you have paid in principal, and the way payments are structured, during the first half of the loan, most of each of your payments goes to paying interest. Basically you pay the bank the interest first, and pay off the principal later in the loan.

I would call the bank and find out the payoff balance, it may be slightly higher than you think. Then I would determine what the Kelly blue book value of your car would be, and if you can reasonably expect to get that price. You can advertise it for now, and see if you can get any bites. If you do, sell it and pay off the debt, if not I would advise to add a little extra to each payment, anything above the minimum payment will go directly to the loan principal, and not interest to the bank.

Good luck

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