My wife and I have $30k in a personal loan (12% rate) that we used to pay off our credit card debt. It's a 72 month loan. The payment is $650/mo.
Our other debt is one of our cars. We have $7,000 left to pay. Rate of 3%. It's $250/mo. The car can be sold for $30k ($23k in pocket after we pay off the car loan).
As far as assets, we don't have much. We have $7k in some mutual funds and about $3k in some crypto. Neither of which is currently being paid into.
The thing is, we have two cars and we're in a weird situation where we're taking care of her dad's car for 6 months and have access to use it. As an aside, I've approached her dad about possibly buying his car and he's told me to come up with an offer.
Anyway, here's my thought... Sell my car for hopefully close to $30k. Pay off the loan. That leaves me with $23k in pocket and $250/mo in my wallet.
Use the $23k + the $7k in mutual funds to pay off the personal loan. That frees up an additional $650/mo and gets us out of debt.
So we're now up to $900/mo more in our wallet each month.
Save that $900/mo for the next 6 months while we have her dad's car and get some cash for taxes, and a small down payment, and get a loan for another car or buy her dad's car (which I think I can get a good deal on).
Yes, I am trading one debt for another BUT an auto loan has significantly better rates than the 12% rate I got for this personal loan to pay off the credit card. And considering the $900/no I'm paying now for car and personal loan, a $25,000 car loan would be half that monthly payment. Plus, with the auto loan at least I'm getting something (a car) for the payment.
Am I crazy?
Also, yes, we've changed our spending habits and we no longer use a credit card. We want to be debt free and actually start saving and investing our money.
Submitted October 27, 2024 at 02:05AM by Barn0m https://ift.tt/fWPb26N
