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| *Loan,banking and credit>>>auto loan |
Which is best? pay off credit card or auto loan? Both balances are equal and I want 2 pay in full w/tax refund |
Which is best? pay off credit card or auto loan? Both balances are equal and I want 2 pay in full w/tax refund Paying off the account with the highest interest rate is the most obvious answer. However some other conciderations: paying of the CC card instead of the car loan will do the most to increase your credit score. CC cards are 'revolving' unsecured lines of credit. Having a high balance will negatively affect your credit score especially if your current balance is greater that 33% of you credit limit. Car loans are secure 'installment' loans that have a fixed payment for a fixed time frame. These types of loans positively affect your credit score. Plus, CC cards usually have front-end interest: so the minimum payment usual goes only to interest not paying down the principle. Unless the Car loan is significantly higher that the CC, you should pay off the CC card. Plus, paying off the CC will open up available credit in case of emergency. the one with highest interest rate The balances are equal but which has the higher interest rate? Pay that one off first. I would say your credit Card, since you might put up more and remain in debth, also the inrest could change, and in general its not healthy to have a balance on your credit, on the other hand the car loan is a fixed rate usually, and its just a payment that you have to put into schedule, so between those two I would defenittly recomend get off the credit card first What about the interest rate? whichever is the higher interest pay that which one is charging the higher interest rate-probably the credit card so pay that off first |
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