{"id":2210,"date":"2012-09-28T06:24:41","date_gmt":"2012-09-28T13:24:41","guid":{"rendered":"http:\/\/add-vodka.com\/?p=2210"},"modified":"2015-07-09T12:51:56","modified_gmt":"2015-07-09T19:51:56","slug":"paying-down-my-loan","status":"publish","type":"post","link":"https:\/\/add-vodka.com\/paying-down-my-loan\/","title":{"rendered":"Paying Down My Loan"},"content":{"rendered":"<p>When I bought my car in January, I made a tentative plan as to how I was going to pay it off and in what time frame. However, since January, I&#8217;ve started making $500+ more per month and have a steady income with which to make plans.<\/p>\n<p>When I had originally acquired my loan I didn&#8217;t feel the heat to pay it off. It was better to me to have the debt\u00a0and be able to get to work then to be debt free and working in a mall. So, I have been plugging away and paying it off at the normal rate. Now, however, I have no interest in remaining in car loan debt if I don&#8217;t have to.<\/p>\n<h3>Start of Loan<\/h3>\n<p>I bought the car for $12,567.90. This is inclusive of all tax. Insurance was paid upfront in cash.<\/p>\n<h3>Now (Months Later)<\/h3>\n<p>The balance as of today is $9,872. I have made several extra payments on it, over and above my $220\/month mandatory payment. I&#8217;ve made extra payments from $60 to $700. I&#8217;ve so far paid of $2695 in six months. Each month, this averages $449.16.<\/p>\n<h3>Terms<\/h3>\n<p>My loan is open, meaning I can pay it back at any time in full without any penalties.<\/p>\n<p><img decoding=\"async\" class=\"alignnone\" src=\"http:\/\/www.talkgreen.ca\/wp-content\/uploads\/2009\/02\/hondacivic-450x337.jpg\" alt=\"\" width=\"360\" height=\"270\" \/><\/p>\n<p>It&#8217;s currently at 4.99% which is fine. The loan was meant to be paid back in five years, but of course I would like it to be a much shorter time frame than that.<\/p>\n<h3>The Plan<\/h3>\n<p>I&#8217;ve several times tried to make a plan to pay down my\u00a0personal loan.<\/p>\n<p>At the rate I am going, I&#8217;ll have my loan paid off in 1.8 years, or, 20 months. I used to want to almost half that. I wanted to pay it off in one year (from October 1).<\/p>\n<p>This means I&#8217;d have to tackle it at a rate of $816\/month.<\/p>\n<p>Can I do it?<\/p>\n<p>Probably.<\/p>\n<p>Let&#8217;s look at the numbers.<\/p>\n<ul>\n<li>Most months, including my car loan payments, I have about $500 left over for savings (above and beyond my RRSP and TFSA savings)<\/li>\n<li>This excludes my extra income from blogging and babysitting<\/li>\n<li>I have been earning and extra $300-400 each month from the aforementioned side gigs<\/li>\n<li><a href=\"http:\/\/add-vodka.com\/why-i-live-in-a-bad-neighborhood\/\" target=\"_blank\">My living expenses are relatively low,<\/a>\u00a0if I want them to be.<\/li>\n<li>Total extra income is about $800-$1000\/month\u00a0(excluding some income which is funnelled directly into my RRSP)<\/li>\n<\/ul>\n<h3><span style=\"line-height: 22.5px;\">Conflicting Money Goals<\/span><\/h3>\n<p>After crunching the numbers I know that I could do it. I could pay off my loan in a year. But at the end of all of that, what would I have?<\/p>\n<p>$220\/month extra? Yes. But that&#8217;s not much money. I have three things that I want to do within the next year that will take a big outlay of cash:<\/p>\n<ul>\n<li><span style=\"line-height: 21px;\">Europe\u00a0<\/span><\/li>\n<li><span style=\"line-height: 21px;\">Buy a house<\/span><\/li>\n<li><span style=\"line-height: 21px;\">Get married<\/span><\/li>\n<\/ul>\n<div>I&#8217;m anticipating Europe to be at least $4,000. Buying a house &#8211; well, I&#8217;ll want to save an extra few thousand for that as well. To get married is an expensive venture, so I&#8217;m looking at a few thousand of my own money for that (plus some of J&#8217;s money).<\/div>\n<div><\/div>\n<div>Most of the extra money that I would be throwing at the loan would be more than enough to pay for Europe and a wedding, but not necessarily add to the house.<\/div>\n<div><\/div>\n<div>We already have quite a bit of savings for the house.<\/div>\n<div><\/div>\n<div>The loan still doesn&#8217;t really get under my skin as much as debt might bother other financial bloggers. Every month I pay less interest on it and right now it&#8217;s only about $40\/mo. The car was a necessary purchase for my lifestyle (I think my job even requires that I have a car) and where we live.<\/div>\n<div><\/div>\n<div>It&#8217;s not like I put the car on a credit card; it&#8217;s a personal loan! Low(ish) interest, flexible terms, and I&#8217;m thinking that my other goals are more important than tackling this one.<\/div>\n<div><\/div>\n<div><\/div>\n<div><span style=\"color: #000000;\"><strong>Do you think I&#8217;m crazy for not wanting to pay this back sooner?\u00a0<\/strong><\/span><\/div>\n","protected":false},"excerpt":{"rendered":"<p>When I bought my car in January, I made a tentative plan as to how I was going to pay it off and in what time frame. However, since January, I&#8217;ve started making $500+ more per month and have a steady income with which to make plans. When I had originally acquired my loan I &hellip;<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[231],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Paying Down My Loan<\/title>\n<meta name=\"description\" content=\"When I bought my car in January, I made a tentative plan as to how I was going to pay off the loan and in what time frame. 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