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Old 07-29-2020, 10:40 AM   #56
foshjowler
 
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Drives: 2017 Camaro 2.0T
Join Date: Jan 2020
Location: Raleigh, North Carolina
Posts: 304
Quote:
Originally Posted by ember1205 View Post
I've always followed the following premise when it comes to over-paying and/or paying early...

If I am able to pay more than the scheduled amount, or can pay ahead of time, I don't. Instead, I put that money into a savings account with a higher yield and let it work for me. As long as the interest rate that I am earning is either better than, or only slightly less than, the interest rate of the loan, putting that money away helps me to build a financial cushion should I need it during the course of the loan.

Once I have enough money saved up from doing the above to where I can pay the loan off in full, I do so.

And remember: If you ever have to choose between making a car payment or paying rent, make the car payment. You can live in your car but you can't drive your house. lol
I went to school for finance, so I understand the principal (pun kind or intended) behind it all. Though most people, myself included, aren't that disciplined with money. It's just not worth the extra time and effort over setting up recurring payments/savings. At the end of the day, I am still better off financially if I overpay on my loans than if I spent it elsewhere. I think I'm only paying an extra like $5 a week, so we're not talking a large sum of money anyway.
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