Is a car loan bad debt?
Here is another way to look at it. Does this debt enable you to buy more car than you can really afford, or more car than you need? If so, it's bad debt. Let's say you don't have the price of a new car, but you can buy a used car with the cash you have. You will have to repair the car occasionally, but this is generally a lot less than the payments on a new car. The value of your time may make sitting around waiting while your car is repaired very expensive (if, like me, you can earn money in fine grained amounts anywhere between 0 and 80 hours a week, and you don't get paid when you're at the mechanic's) in which case it's possible to argue that buying the new car saves you money overall. Debt incurred to save money overall can be good: compare your interest payments to the money you save. If you're ahead, great - and the fun or joy or showoff potential of your new car is simply gravy. Now let's say you can afford a $10,000 car cash - there are new cars out there at this price - but you want a $30,000 car and you can afford the payments on it. If there was no such thing as borrowing you wouldn't be able to get the larger/flashier car, and some people suggest that this is bad debt because it is helping you to waste your money. You may be getting some benefit (such as being able to get to a job that's not served by public transit, or being able to buy a cheaper house that is further from your job, or saving time every day) from the first $10,000 of expense, but the remaining $20,000 is purely for fun or for showing off and shouldn't be spent.  Certainly not by getting into debt. Well, that's a philosophical position, and it's one that may well lead to a secure retirement. Think about that and you may decide not to borrow and to buy the cheaper car. Finally, let's say the cash you have on hand is enough to pay for the car you want, and you're just trying to decide whether you should take their cheap loan or not. Generally, if you don't take the cheap loan you can push the price down. So before you decide that you can earn more interest elsewhere than you're paying here, make sure you're not paying $500 more for the car than you need to. Since your loan is from a bank rather than the car dealership, this may not apply. In addition to the money your cash could earn, consider also liquidity. If you need to repair something on your house, or deal with other emergency expenditures, and your money is all locked up in your car, you may have to borrow at a much higher rate (as much as 20% if you go to credit cards and can't get it paid off the same month) which will wipe out all this careful math about how you should just buy the car and not pay that 1.5% interest. More important than whether you borrow or not is not buying too much car. If the loan is letting you talk yourself into the more expensive car, I'd say it's a bad thing. Otherwise, it probably isn't. "Good debt and ""Bad debt"" are just judgement calls.  Each person has their own opinion on when it is acceptable to borrow money for something, and when it is not.  For some, it is never acceptable to borrow money for something; they won't even borrow money to buy a house.  Others, of course, are in debt up to their eyeballs. All debt costs money in interest.  So when evaluating whether to borrow or not, you need to ask yourself, ""Is the benefit I am getting by borrowing this money worth the cost?"" Home ownership has a lot of advantages: For many, these advantages, coupled with the facts that home mortgages are available at extremely low interest rates and that home mortgage interest is tax-deductible (in the U.S.), make home mortgages ""worth it"" in the eyes of many. Contrast that with car ownership: For these reasons, there are many people who consider the idea of borrowing money to purchase a car a bad idea.  I have written an answer on another question which outlines a few reasons why it is better to pay cash for a car." "Just to argue the other side, 1.49% is pretty low for a loan. Let's say you have the $15k cash but decide to get the car loan at 1.49%. Then you take the rest of the money and invest it in something that pays a ~4% dividend (a utility stock, etc.). You're making money on the difference. Of course, there's no guarantee that the underlying stock won't drop in value, but it might go up, too. And you'll likely pay income tax on the dividends. Still, you have a good chance of making money by taking the loan. So I will argue that there are scenarios where taking advantage of a low interest rate loan can be ""good"" as an investment opportunity when the risk/reward is acceptable. Be careful, though. There's nothing wrong with paying cash for a car!" "A car loan might be considered ""good"" debt, if the following circumstances apply: If, on the other hand, you only qualify for a subprime loan, or you're borrowing to buy a needlessly expensive car, that's probably not a good idea." What's missing in your question, so Kate couldn't address, is the rest of your financial picture.  If you have a fully funded emergency account, are saving for retirement, and have saved up the $15K for the car, buy in cash.  If you tell me that if the day after you buy the car in cash, your furnace/AC system dies, that you'd need to pay for it with an $8K charge to a credit card, that's another story.  You see, there's more than one rate at play. You get close to zero on you savings today. You have a 1.5% loan rate available. But what is your marginal cost of borrowing? The next $10K, $20K? If it's 18% on a credit card, I personally would find value in borrowing at sub-2.5% and not depleting my savings.  On the other side, the saving side, does your company offer a 401(k) with company match? I find too many people obsessing over their 6% debt, while ignoring a 100% match of 4-6% of their gross income.  For what it's worth, trying to place labels on debt is a bit pointless. Any use of debt should be discussed 100% based on the finances of the borrower. The risk besides the extra interest is that you might be upside down on the loan. Because the car loses value the moment you drive off the lot, the slower you pay it off the longer it takes to get the loan balance below the resale value. Of course if you have a significant down payment, the risk of being upside down is not as great. Even buying a used car doesn't help because if you try to sell it back to the dealer the next week they wont give you the full price you paid. Some people try and split the difference, get the longer term loan, but then pay it off as quickly as the shorter term loan. Yes the interest rate is higher but if you need to drop the payment back to the required level you can do so. The good debt/bad debt paradigm only applies if you are considering this as a pure investment situation and not factoring in: A house is something you live in and a car is something you use for transportation. These are not substitutes for each other! While you can live in your car in a pinch, you can't take your house to the shops. Looking at the car, I will simplify it to 3 options: You can now make a list of pros and cons for each one and decide the value you place on each of them. E.g. public transport will add 5h travel time per week @ $X per hour (how much you value your leisure time), an expensive car will make me feel good and I value that at $Y. For each option, put all the benefits together - this is the value of that option to you. Then put all of the costs together - this is what the option costs you. Then make a decision on which is the best value for you.  Once you have decided which option is best for you then you can consider how you will fund it.
"It is possible to achieve a substitute for refinancing, but because of the ""short"" life of cars at least relative to housing, there are no true refinancings. First, the entire loan will not be able to be refinanced.  The balance less approximately 80% of the value of the car will have to be repaid.  Cars depreciate by something like 20% per year, so $2,000 will have to be repaid. Now, you should be able to get a loan if your boyfriend has good credit, but the interest rate will not drop too much further from the current loan's rate because of your presumably bad credit rating, assumed because of your current interest rate. While this is doable, this is not a good strategy if you intend to have a long term relationship.  One of the worst corruptors of a relationship is money.  It will put a strain on your relationship and lower the odds of success. The optimal strategy, if the monthly payments are too high, is to try to sell the car so to buy a cheaper car.  The difficulty here is that the bank will not allow this if balance of the loan exceeds the proceeds from the sale, so putting as much money towards paying the balance to allow a sale is best. As a side note, please insure your car against occurrences such as theft and damage with a deductible low enough to justify the monthly payment.  It is a terrible position to have a loan, no car, and no collateral against the car." "Is it not that bad? Depends how bad is bad. The problems causes by a government having large debt are similar to those caused by an individual having large debt. The big issue is: More and more of your income goes to paying interest on the debt, and is thus not available for spending on goods and services. If it gets bad enough, you find you cannot make payments, you start defaulting on loans, and then you have to make serious sacrifices, like selling your property to pay the debt. Nations have an advantage over individuals in that they can sometimes repudiate debt, i.e. simply declare that they are not going to pay. Lenders can then refuse to give them more money, but that doesn't get their original loans paid back. In theory other nations could send in troops to seize property to pay the loan, but this is a very extreme solution. Totally aside from any moral considerations, modern warfare is very expensive, it's likely the war would cost you more than you'd recover on the debt. How much debt is too much? It's hard to give a number, any more than one could give a ""maximum acceptable debt"" for an individual. American banks have a rule of thumb that they won't normally loan you money if your total debt payments would be more than 1/3 of your income. I've never come close to that, that seems awfully high to me. But, say, a young person just starting out so he's not making a lot of money, and he lives someplace with high housing prices, might find this painful but acceptable. Etc." The hard and fast rule is to pay off high interest loans first, but each individual's situation is different so there are some things to consider. Student loan interest is tax deductible up to $2,500.  Will your student loan interest exceed $2,500 for the year?  If so I would try to pay down the student loan first to bring down the total interest for the year so that you get as much interest back as possible on your tax return.  Also, it may be beneficial to pay off the car first to close that account so that you are only left with the 1 loan.  Once you have the car loan payment out of the way you can dedicate that amount to paying off the student loan. I'm in almost the same situation as you.  I currently have a mortgage and car payment.  In 6 months my grace period will be over, and my student loan payments will start.  I have $100k in student loan debt.  So I will have a $1,100 mortgage payment, $1,100 student loan payment, and $700 car payment (car loan is 0%).  I don't want to have 3 loans active so I will pay off my car loan in a 2-3 months to get that out of the way.  Then I will pay down my student loan by paying $700 extra every month. An auto title loans are typically utilized by those that wish to obtain a funding with bad credit rating or no credit in any way. An auto-mobile title lending frequently called a vehicle title lending or merely title funding as well as pink slip funding’s. You merely should have a vehicle that is paid off or nearly paid off and also you could make use of the auto title as security to obtain the cash money you require, enabling you to continue driving your vehicle while paying your loan.   Get Auto Title Loans in Bakersfield CA and nearby cities Provide Car Title Loans, Auto Title Loans, Mobile Home Title Loans, RV/Motor Home Title Loans, Big Rigs Truck Title Loans, Motor Cycle Title Loans, Online Title Loans Near me, Bad Credit Loans, Personal Loans, Quick cash Loans   Contact Us: Get Auto Title Loans Diamond Bar CA 28356 Chinook Place, Diamond Bar, CA 91765 909-345-2309 autodiamond11@gmail.com http://getautotitleloans.com/car-and-auto-title-loans-diamond-bar-ca/ I have a car loan paid in full and even paid off early, and 2 personal loans paid in full from my credit union that don't seem to reflect in a positive way and all 3 were in good standing. But you also  My credit card utilization is 95%. I have a total of 4 store credit cards, a car loan, 2 personal loans. So assuming no overlap, you've paid off three of your ten loans (30%).  And you still have 95% utilization.   What would you do if you were laid off for six months?  Regardless of payment history, you would most likely stop making payments on your loans.  This is why your credit score is bad.  You are in fact a credit risk.  Not due to payment history.  If your payment history was bad, you'd likely rank worse.  But simple fiscal reality is that you are an adverse event away from serious fiscal problems.   For that matter, the very point that you are considering bankruptcy says that they are right to give you a poor score.  Bankruptcy has adverse effects on you, but for your creditors it means that many of them will never get paid or get paid less than what they loaned.   The hard advice that we can give is to reduce your expenses.  Stop going to restaurants.  Prepare breakfast and supper from scratch and bag your lunch.  Don't put new expenses on your credit cards unless you can pay them this month.  Cut up your store cards and don't shop for anything but necessities.  Whatever durables (furniture, appliances, clothes, shoes, etc.) you have now should be enough for the next year or so.   Cut your expenses.  Have premium channels on your cable or the extra fast internet?  Drop back to the minimum instead.  Turn the heat down and the A/C temperature up (so it cools less).  Turn off the lights if you aren't using them.  If you move, move to a cheaper apartment.  Nothing to do?  Get a second job.  That will not only keep you from being bored, it will help with your financial issues.   Bankruptcy will not itself fix the problems you describe.  You are living beyond your means.  Bankruptcy might make you stop living beyond your means.  But it won't fix the problem that you make less money than you want to spend.  Only you can do that.  Better to stop the spending now rather than waiting until bankruptcy makes your credit even worse and forces you to cut spending.   If you have extra money at the end of the month, pick the worst loan and pay as much of it as you can.  By worst, I mean the one with the worst terms going forward.  Highest interest rate, etc.  If two loans have the same rate, pay the smaller one first.  Once you pay off that loan, it will increase the amount of money you have left to pay off your other loans.  This is called the debt snowball (snowball effect).   After you finish paying off your debt, save up six months worth of expenses or income.  These will be your emergency savings.   Once you have your emergency fund, write out a budget and stick to it.  You can buy anything you want, so long as it fits in your budget.  Avoid borrowing unless absolutely necessary.  Instead, save your money for bigger purchases.  With savings, you not only avoid paying interest, you may actually get paid interest.  Even if it's a low rate, paid to you is better than paying someone else.   One of the largest effects of bankruptcy is that it forces you to act like this.  They offer you even less credit at worse terms.  You won't be able to shop on credit anymore.  No new car loan.  No mortgage.  No nice clothes on credit.  So why declare bankruptcy?  Take charge of your spending now rather than waiting until you can't do anything else. A loan that does not begin with **at least a 20% deposit** and run through a term of **no longer than 48 months** is the world's way of telling you that *you can't afford this vehicle*.  Consumer-driven cars are rapidly depreciating assets. Attenuating the loan to 70 months or longer means that payments will not keep up with normal depreciation, thus trapping the buyer in an upside down loan for the entire term. Car Loan is a personal loan which helps you take loan for the car which allows the buyer to pay in monthly payments instead of paying the full price all at once. HDFC Bank provides Flexible, Quick, and Cost-Effective ways to get Car Loans in India. NO, you pay off the Highest interest charging accounts first. The zero interest loan should be the Last one you pay off. Basically payoff your student loan and put the extra money to the car loan