Long story short: My girlfriend has a 20.53% APR car loan. No one will refinance the loan because of the value of the car, roughly $5,000. Theres still 50 months left on the loan. Total left with interest is $17,701 and the early payoff amount as of today is $11,790. She currently has $15,000 in savings and an average of $1,100 surplus each month.
I suggested that she send a one time payment, ~$5,000, to get the principal down and then pay extra each month to get it done in a year. She’s hesitant about taking that much out of her savings. I need some help putting this in perspective.
How should she go about paying off this loan in 1-2 years. Which way would save the most money?