Between both of our student loans and car loan, we are in the hole about $48,000. My spouse is adamant about paying off all debt in the next month or two since we currently have about $55,000 in the bank. The issue is that I don’t see why we need to pay off everything so quickly and basically drain our account.
Our monthly take home net income is about $8,500 a month and after all bills are paid, we have about $4,300 left to save or do whatever we want. Our school loans and car loan use up a little over $1,000 dollars of our monthly income.
The way I see it, the amount that we are paying for those loans isn’t really hurting us. We are still saving a good amount and don’t see the rush to use up most of our money to eliminate these loans. My spouse claims that it’s alright because we will be able to recover fairly quickly because of the extra grand we would now have.
But what about emergencies? Or something that requires us to spend a large unexpected amount of money? Doing it their way would leave us with about $7,000 in the bank and it just seems like such an extreme to pay so much off so fast. Would paying off all this debt this fast be more beneficial than I’m thinking? I want to keep an open mind before really deciding what to do.
Car loan has about 3% interest and $8,000 left on it. There are 3 school loans, all at about 4-6% interest rate. One is at $13,000, the other at around $3,000 and one big one at around $24,000.