What would you do in this scenario?

[ouchris]

Hello all,

I'm looking for advice on the following scenario:

I have $26,000 savings. I have a car loan @500 a month @ 2.9% with $15,500 left. I have a car loan @3.9% @270 month with $16,000 left. I have student load debt @6.0% @4,500 and I pay $150/month.

Would anyone advise paying any of these loans off outright? Perhaps the student loan since it's the highest interest rate? Obviously I don't have enough to pay off everything, but would you mix and match a car loan and the student loan etc or keep paying these monthly and don't spend any of the $26k?

[LittleMissSplendid]

Is this just savings or your emergency fund?

If it is not your emergency fund then it makes sense to use the bulk of it for debt, but if it IS your emergency fund then perhaps only use half of it for debt.

Is that student loan federal or private?

If it is private then I would pay that off because the interest rates on those are variable, if it is federal then leave it be. Next I'd pay off the $500 a month car because I think paying $500 a month for a car is absurd.

I'm sure others will chime in with different ideas, but ultimately you'll have to do what feels right to you.

[snafu]

Welcome to SA where we are all from different backgrounds with different experiences and offer different suggestions. If you haven't done it yet, work our your basic, must pay, monthly expenses like rent/mortgage, utilities [heat,electric,water,trash, basic phone], loans payments like mentioned car loans [2], insurance, vehicle operational costs, medical, food. An emergency fund needs to be fluid and able carry you if you lost employment for example.o

You've made no mention of retirement plan, so I hope that's in place. What rate are you getting on your savings? Given the limited details outlined, I would pay off the SL outright and redirect the monthly $ 150. to car loan with higher interest. It's called an 'avalanche' method of paying off debt.

[bigdaddybus]

I would pay off the student loan asap and invest the rest.

I would invest rather than paying off the 2.9% and 3.9% car loans as every year except 2008 I have made a significantly better returns on my money (2008 I lost .8%)

[jIM_Ohio]

I'd want to know how much money you make, and how much money you spend each month.

[moneysma]

I agree with most others...as long as this savings isn't your emergency fund, then you should pay off the student loan ASAP. From there it all depends on the rest of your financial situation and how much you have for retirement, etc.

[bjl584]

We need more info.

Is the $26K all the cash that you have?

Why do you have 2 car loans?

What is your income and other expenses per month?