Invest SSIA or pay off car loan?

E

Eastcoast

Guest
Hi all,

I would love someone to tell me why I should pay off a car loan of €15903 with almost 3 years to go (will save €681.50 by paying €5221.50 now) with Bank of Scotland Ireland.

If I invested this money with the same bank (using their online calculator) 4% over 2 years, I would get interest of €1297.68.

I thought that paying ones debts first with SSIA money would yield greatest savings.

Have I got it wrong!

Thanks,
 
What did you borrow ?
What is the total repayable (principal + interest) ?

Interest on savings will be subject to DIRT at 20%.
How much you planning to save ?
 
How will you be getting interest of 1297.68 over 2 years on a lumpsum of 5221.50 ?

In case you have still got 15903 outstanding on your car loan, you will be saving a lot more than 681.50 by clearing it.

Using the loan calculator a loan of 15903 over 3 years will cost 1776.28.
 
Sorry, I had a typing error. I have pasted and corrected below.
Original loan was €18000 over 4 years, 1 year repaid.

I would love someone to tell me why I should pay off a car loan of €15903 with almost 3 years to go (will save €681.50 by paying €15221.50 now) with Bank of Scotland Ireland.

If I invested this money with the same bank (using their online calculator) 4% over 2 years, I would get interest of €1297.68.

I thought that paying ones debts first with SSIA money would yield greatest savings.

Have I got it wrong!

Thanks
 
Hi, I got them to post me a quote which says the amount required in full and final settlement of agreed loan of€15903.00 is €15221.50 on close of business 30/3/2007. I have paid almost 1 year off the 4 year loan.
 
Did you pay all the interest up front ? I'd check the loan offer.
 
Hi thewatcher,

The amount loaned was 18000
Amount in interest is 2506.50
According to our statements the direct debit is against the sum of those.
If we now owe15903 and settle now we only pay 15221.50 saving over 600 surely we did not pay interest up front?
 
Well you've only paid just over 2000 off the principal,so how much have you paid so far in total ? i'm guessing around 4000 ?
 
You are right, I have paid around €4500.
But can you tell me thewatcher, would I now be better off clearing the loan or investing the money in Halifax at 4% over the 2 years.

Thanks.
 
As you seems to have been done for the interest up front,by clearing the loan now you will at least save yourself €600. Then the money you would have paid off the loan you can stick in one of these for the same period or less.

High interest Savings Acc

Or you can stick the lump sum in one of these,but you will be subject to DIRT at 20% of the interest(with both options) and you will still have to pay off the loan here and deduct the €600 from whatever you get in interest .

High interest Lump Sums

I'll let you cruch the numbers yourself !.
 
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