Pay off student loans or finance a car?
I currently have $8000 saved up. I plan on adding $4000 to that amount from working during the summer. Given this, I will have $12,000 in total. I am fortunate enough to have received a scholarship that covered my tuition throughout my schooling as an undergraduate, so my loans are not too daunting. After all is said and done I will have only accumulated $12,000 in loans, far less than most people. Do I pay off my loans in their entirety when I graduate or do I make a significant down payment on a gently used car? (Toyota Corolla/Honda Civic with less than 10K miles)
Note: I have a minimum-wage job that covers my cell phone, rent, and groceries right now.
- STEVEN FLv 78 years agoFavorite Answer
Pay $4000 CASH for a serviceable car and apply the rest to your loans. Until you have an ESTBLISHED income significantly above minimum wage, you can't afford a car anyone will TAKE a down payment on. Even then, NO ONE can actually afford a car the ONLY have a down payment for.
- Anonymous8 years ago
If you have a low rate on your student loan, you can always make double payments. If you do not need the car immediately, you should wait until you get a better job that will pay more.Source(s): Retired bill collector 35 years