# Little extra money...



## highwood (Jan 12, 2012)

So we have some retroactive pay that came to us via my employment, due to salary negotiations. I have no credit card debt and just a 0% interest car loan with about 3.5 years left on it. I could put down about 5 or 6 months of extra payment on my car loan or would you just leave the money for something else down the road? The monthly payments are not that bad for me and my job is relatively secure.

I guess my question is...is it worth it to pay down a 0% loan faster or just ride it out to the full term?


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## Not (Jun 12, 2017)

If it were me I would sock that money away. You never know when misfortune will hit and having that safety net there will give you peace of mind. If it were a high interest loan I would say pay it down but with zero percent I'd rather save the money.


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## Young at Heart (Jan 6, 2015)

Extra money is important for a rainy day fund. figure out a way to put it aside, where you will not spend it. You never know when you are going to need money for an insurance deductible (medical or car insurance) for a high medical co-pay on something not normally covered, or something breaks on your car that needs to be repaired, or an appliance that needs to be repaired or replaced.

Good luck. 

If you have an adequate rainy day fund, then don't pay down a 0% loan, instead put it into a 401K/IRA or better yet a Roth IRA.


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## happy as a clam (Jan 5, 2014)

Cash is king. Can never have enough socked away for "just in case".

Zero interest loan is as good as it gets so no need to spend your own money upfront on that.


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## highwood (Jan 12, 2012)

Thanks all, that is what I am thinking too. My job is relatively safe so to pay off the reminder of the loan for the next 3.5 years will not be a problem and it is a small payment only $300.00 per month so nothing too major.

I think I will just set the money aside.


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## Rocky Mountain Yeti (Apr 23, 2017)

All good advice, but one caveat is necessary: make sure that car is fully insured (not just liability) The worst possible outcome is for something to go wrong and you to have to continue paying for an asset you no longer have.

And if you are the type to carry less insurance on a car you own outright than you would on a car still under lien, then consider that cost differential against whatever value you would get from investing the money you might otherwise use to pay off the note. 

Probably still best to do as everyone has said and continue to enjoy the "free money," but depending on the individual and risk tolerance, it may not be an automatic slam dunk.


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## heartsbeating (May 2, 2011)

Be responsible... blow it on a mini trip away


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## MrsHolland (Jun 18, 2016)

Do you own your home outright, no mortgage? If you have a mortgage then an offset account is a great way to go as it lowers interest but the money is still available if you need it.


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## chillymorn69 (Jun 27, 2016)

highwood said:


> So we have some retroactive pay that came to us via my employment, due to salary negotiations. I have no credit card debt and just a 0% interest car loan with about 3.5 years left on it. I could put down about 5 or 6 months of extra payment on my car loan or would you just leave the money for something else down the road? The monthly payments are not that bad for me and my job is relatively secure.
> 
> I guess my question is...is it worth it to pay down a 0% loan faster or just ride it out to the full term?


Through it in the stock market. The market is kicking ass right now

Open an ira and get a tax credit.


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