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If you were getting a large amount of money....

My dh is going to be getting a large bonus soon and we have been debating as to what part of our debt to apply it to. We think that applying it to the item with the largest interest rate would be the way to go which would be one of our vehicles over the house. With that in mind though cars depreciate in value whereas if we were to put the money into our house then it will be made up when we go to sell the house. This has been something we have been discussing for awhile and cannot really come to a conclusion. If we pay off the car then we can put the payment amount to the house payment. Some outside input would help. Thanks!

 
Melbornj

Asked by Melbornj at 2:23 PM on Apr. 7, 2009 in Money & Work

Level 41 (131,608 Credits)
This question is closed.
Answers (7)
  • Yes the one that has the highest interest rate...
    It makes the most sense and in the long run you will be saving money.
    Dannee

    Answer by Dannee at 2:28 PM on Apr. 7, 2009

  • I would put it towards the car. Because the market is so bad right now your house would not be listed for what you would want if you were to fix it up. The money that you are saving from teh car payment you can put towards the house so it's a win-win situation
    Anonymous

    Answer by Anonymous at 2:26 PM on Apr. 7, 2009

  • Pay off your lowest debt first, then your second lowest, etc. Take those amounts that you've been sending in monthly and then apply them to the 3rd lowest, etc. Before you know it, you will be debt free.
    EireLass

    Answer by EireLass at 2:28 PM on Apr. 7, 2009

  • always pay off your credit cards, debts. Hold on to your money, Because times are going to get hard. Do not buy anything large right now. Buy extra can food.
    gammie

    Answer by gammie at 2:35 PM on Apr. 7, 2009

  • I would pay off the car first, then put the old car payment towards the house every month.
    LoniRae89

    Answer by LoniRae89 at 2:41 PM on Apr. 7, 2009

  • Car first, if that is the lowest $ amount debt that you have. Work your way from the smallest debt to the largest debt.
    slw123

    Answer by slw123 at 3:12 PM on Apr. 7, 2009

  • Firelass is right, even if your lowest debt is a $200 credit card that you only pay $10 a month on, pay that off, take that $10 a month and put it toward the next bill. If you pay off $100 or $200 a month worth of bills, that money can go straight toward your car payment. Then once the car is paid off, put that money onto the house payment or fixing up the house so that, in that time, maybe the housing market will get better and you can list your house for sale for more than owed on it. Right now, houses aren't selling for what they are worth so there is no way I would sink more money into the house in hopes of selling it for more.
    AprilDJC

    Answer by AprilDJC at 3:41 PM on Apr. 7, 2009