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    29 Debating to put my bonus into HYSA or make a significant payment to a 7.45% Interest Car Note

    Hello –

    I'm a 29, with no debt outside my car payment, I was off to a new city and unfortunately bought a car in the worst timing possible. The interest rate is pretty high and locked at 7.45% a year.

    The monthly payment is $900 USD, while it's not an issue to my monthly budget, it would be beneficial to use this money for savings, investing, and some fun treats here and there. I received my bonus this year, and after some percentage going to savings, I have 4.5K that could be used to lower my total loan amount from $25,710.97 to $21,210. This bonus payment would be applied to the principal of my account.

    I have about $35,000 USD in a HYSA account so including the bonus would be nice, but not including it wouldn't leave me without savings as a whole.

    I'm open to any feedback.

    29 Debating to put my bonus into HYSA or make a significant payment to a 7.45% Interest Car Note
    byu/Efficient-Focus-4073 inpersonalfinance



    Posted by Efficient-Focus-4073

    9 Comments

    2. AlternativeDeal4072 on

      Pay down your car loan (or even better sell the car if it hasn’t depreciated too much and get a boring, cheap 6-7 year old used car…or no car if you can get to work using public transportation.)

    5. tillyofthevalley on

      7.45% is definitely in the “pay it off sooner” zone.

      If you want to see the cold hard numbers you could calculate how much you’d save in interest with that quicker payoff vs. how much that same amount would grow in a HYSA (remembering that most HYSAs are subject to change their rates, but your interest rate is locked in). Math’s not my strong suit so I’ll let you try that one 🙂

    6. waterbuffalo750 on

      If you put it in the HYSA you’ll get around 3% on it, while losing 7.5% on the same amount on your car loan.

      Put it toward the car.

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