marshmallow
Registered User
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I've noticed that posters are regularly advised on the forum to pay off smaller loans/credit cards etc before paying lump sum off their mortgages and I'm trying to figure this out.
I have a lump sum of 30k which I'm considering putting towards my 400k odd mortgage, yet I also have a car loan at approx the same amount (30k). There is only four years left on my car loan yet there are 30 left on my mortgage, so taking compound interest into account, surely it is more advisable to reduce the mortgage by 30k rather than clear the car loan?
Have been using cost of credit calculators which tell me that my car loan cost of credit is 5k approx, but cannot find anything which tells me the savings on paying off 30k off my mortgage.
Anyone have any advice on the calculations?
Many thanks
I have a lump sum of 30k which I'm considering putting towards my 400k odd mortgage, yet I also have a car loan at approx the same amount (30k). There is only four years left on my car loan yet there are 30 left on my mortgage, so taking compound interest into account, surely it is more advisable to reduce the mortgage by 30k rather than clear the car loan?
Have been using cost of credit calculators which tell me that my car loan cost of credit is 5k approx, but cannot find anything which tells me the savings on paying off 30k off my mortgage.
Anyone have any advice on the calculations?
Many thanks