Comments on: Pay off a loan or put money in savings? http://www.howisavemoney.net/finances/pay-off-a-loan-or-put-money-in-savings/ Tips and tricks to save money, manage credit and reduce debt Mon, 13 Feb 2012 06:12:40 +0000 hourly 1 http://wordpress.org/?v=3.1.2 By: ony http://www.howisavemoney.net/finances/pay-off-a-loan-or-put-money-in-savings/#comment-12191 ony Tue, 17 Jul 2007 18:33:24 +0000 http://www.HowISaveMoney.net/finances/pay-off-a-loan-or-put-money-in-savings/#comment-12191 How about this: Lately I have switched a ?4000 loan over to a credit card with 0%. Sure I have to pay a transfer fee of 2% but then I get nil interest for 12 months. I then get 6% interest on my savings and pay no interest on my loan. All I have to do is keep up the credit card payments and switch every year to another 0% credit card. Saves me money and has helped get me out of debt much quicker. <a href="http://www.atozofhairloss.com/debtAdvice" rel="nofollow">My Debt Advice Website</a> How about this:
Lately I have switched a ?4000 loan over to a credit card with 0%. Sure I have to pay a transfer fee of 2% but then I get nil interest for 12 months. I then get 6% interest on my savings and pay no interest on my loan. All I have to do is keep up the credit card payments and switch every year to another 0% credit card.
Saves me money and has helped get me out of debt much quicker.
My Debt Advice Website

]]> By: Mark http://www.howisavemoney.net/finances/pay-off-a-loan-or-put-money-in-savings/#comment-12173 Mark Fri, 13 Jul 2007 13:44:02 +0000 http://www.HowISaveMoney.net/finances/pay-off-a-loan-or-put-money-in-savings/#comment-12173 Yes, depending on the type of loan and the return you're earning. Simple math says that you are paying a negative 5.5% by not paying off the loan, the reality is that you are hurting a lot more since you have taxes on interest income. I would say set aside a little bit of money for emergencies ($400 or so if you're in school) but no more until the larger interest debts are paid off. Once out of school, then $1000 is a more appropriate number because it's generally harder to cut expenses like you can in college. Yes, depending on the type of loan and the return you’re earning. Simple math says that you are paying a negative 5.5% by not paying off the loan, the reality is that you are hurting a lot more since you have taxes on interest income.

I would say set aside a little bit of money for emergencies ($400 or so if you’re in school) but no more until the larger interest debts are paid off.

Once out of school, then $1000 is a more appropriate number because it’s generally harder to cut expenses like you can in college.

]]> By: LuLuGal http://www.howisavemoney.net/finances/pay-off-a-loan-or-put-money-in-savings/#comment-12172 LuLuGal Fri, 13 Jul 2007 13:20:17 +0000 http://www.HowISaveMoney.net/finances/pay-off-a-loan-or-put-money-in-savings/#comment-12172 Thank you Mark. So I am guessing you agree that I made the correct choice by paying off that loan. Thank you Mark. So I am guessing you agree that I made the correct choice by paying off that loan.

]]> By: Mark http://www.howisavemoney.net/finances/pay-off-a-loan-or-put-money-in-savings/#comment-12166 Mark Fri, 13 Jul 2007 04:48:44 +0000 http://www.HowISaveMoney.net/finances/pay-off-a-loan-or-put-money-in-savings/#comment-12166 I did a little article about this involving the returns on paying off a credit card vs. having it sit in a savings account. You can read it here: http://www.financingyourfamily.com/2007/06/28/getting-your-net-worth-to-zero-part-two-great-returns/ I am also subscribing to this blog, since the more finance blogs I can read the better my blog will be. I did a little article about this involving the returns on paying off a credit card vs. having it sit in a savings account.

You can read it here: http://www.financingyourfamily.com/2007/06/28/getting-your-net-worth-to-zero-part-two-great-returns/

I am also subscribing to this blog, since the more finance blogs I can read the better my blog will be.

]]> By: LuLuGal http://www.howisavemoney.net/finances/pay-off-a-loan-or-put-money-in-savings/#comment-12163 LuLuGal Thu, 12 Jul 2007 14:45:03 +0000 http://www.HowISaveMoney.net/finances/pay-off-a-loan-or-put-money-in-savings/#comment-12163 Hey Wanda, Thanks for visiting. I feel comfortable with the decision that I made at the time based on the amount of money and the interest rates. Hey Wanda,
Thanks for visiting. I feel comfortable with the decision that I made at the time based on the amount of money and the interest rates.

]]> By: Wanda http://www.howisavemoney.net/finances/pay-off-a-loan-or-put-money-in-savings/#comment-12162 Wanda Thu, 12 Jul 2007 14:20:35 +0000 http://www.HowISaveMoney.net/finances/pay-off-a-loan-or-put-money-in-savings/#comment-12162 I think you did the smartest possible thing. Now you can put the money you would have used for the loan back into savings, making it grow that much more faster. I don't understand why others can't see the logic in that. It's not as if you took a huge nest egg. . the numbers you cite make your decision the obvious choice. I think you did the smartest possible thing. Now you can put the money you would have used for the loan back into savings, making it grow that much more faster.

I don’t understand why others can’t see the logic in that. It’s not as if you took a huge nest egg. . the numbers you cite make your decision the obvious choice.

]]> By: LuLuGal http://www.howisavemoney.net/finances/pay-off-a-loan-or-put-money-in-savings/#comment-12160 LuLuGal Thu, 12 Jul 2007 02:19:37 +0000 http://www.HowISaveMoney.net/finances/pay-off-a-loan-or-put-money-in-savings/#comment-12160 Thank you for the donation. I am going into PayPal now to send that donation over to the savings account...which now stands at $10. Thank you so much...what a lovely early birthday gift. :-) Thank you for the donation. I am going into PayPal now to send that donation over to the savings account…which now stands at $10.
Thank you so much…what a lovely early birthday gift. :-)

]]> By: marie http://www.howisavemoney.net/finances/pay-off-a-loan-or-put-money-in-savings/#comment-12156 marie Wed, 11 Jul 2007 22:44:49 +0000 http://www.HowISaveMoney.net/finances/pay-off-a-loan-or-put-money-in-savings/#comment-12156 Hello Lulu, Just came over by way of a comment that you made on "My 2 dollars" site. I think I would have get the savings as it is important that you have something to fall back on in case of rainy days. You would feel more secure, more relaxed and feel like you have a little "something" that has value. So,in order to help you re-start your saving account, I just paypaled you a little something. Hope it will be the beginning of your "road to riches". Marie Hello Lulu,

Just came over by way of a comment that you made on
“My 2 dollars” site.

I think I would have get the savings as it is important that you have something to fall back on in case of rainy days.

You would feel more secure, more relaxed and feel like you have a little “something” that has value.

So,in order to help you re-start your saving account, I just paypaled you a little something.

Hope it will be the beginning of your “road to riches”.

Marie

]]> By: LuLuGal http://www.howisavemoney.net/finances/pay-off-a-loan-or-put-money-in-savings/#comment-12155 LuLuGal Wed, 11 Jul 2007 17:59:11 +0000 http://www.HowISaveMoney.net/finances/pay-off-a-loan-or-put-money-in-savings/#comment-12155 I see what you are saying Jagular. The thing was that I did not have much money in the savings account anyway so the interest I was getting was not even coming close to the interest that was piling up on the loan (which is for a car I no longer have by the way). Using the money from the savings to pay the loan put me at a zero-ish position because I would still have to be using credit for things that came up anyway. I am trying to build back my efund now but I still need to focus on the fact that I have credit cards with rates up to 20% that need to be paid off since I can only get 5% interest in online savings accounts. I see what you are saying Jagular. The thing was that I did not have much money in the savings account anyway so the interest I was getting was not even coming close to the interest that was piling up on the loan (which is for a car I no longer have by the way).
Using the money from the savings to pay the loan put me at a zero-ish position because I would still have to be using credit for things that came up anyway. I am trying to build back my efund now but I still need to focus on the fact that I have credit cards with rates up to 20% that need to be paid off since I can only get 5% interest in online savings accounts.

]]> By: Jagular http://www.howisavemoney.net/finances/pay-off-a-loan-or-put-money-in-savings/#comment-12154 Jagular Wed, 11 Jul 2007 15:43:32 +0000 http://www.HowISaveMoney.net/finances/pay-off-a-loan-or-put-money-in-savings/#comment-12154 I think you may have made a bit of a mistake there, to tell the truth. Being an international student, you are limited on where you can work, aren't you? So it stands to reason that you would want a larger emergency fund in case of unemployment. If your job situation was excessively stable, I could understand doing what you did. But as it stands, I think I would suggest keeping the e-fund high until you are out of school or on a different visa. But that's just my opinion. I think you may have made a bit of a mistake there, to tell the truth. Being an international student, you are limited on where you can work, aren’t you? So it stands to reason that you would want a larger emergency fund in case of unemployment. If your job situation was excessively stable, I could understand doing what you did. But as it stands, I think I would suggest keeping the e-fund high until you are out of school or on a different visa.
But that’s just my opinion.

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