Re: [MLUG - DISCUSSION] Financal Question

[Stephen Montgomery-Smith <EMAIL:PROTECTED>]

The easiest way is to figure it out both ways, and see which way ends up less.

If there are no tax benefits to the loan, nor any early payment/withdrawal 
charges, it basically depends on comparing the interest rates of the loan versus 
the interest gained from the savings account (but you need to depreciate the 
savings interest by your marginal tax rate assuming that you pay tax on the 
interest in the savings account).

My guess is that you will save money by paying off the loan - on the other hand 
if you invest that $953 in something lucrative (and there I don't have any 
financial advice worthy of offering) you might be better off doing that.


Jerry Gamblin wrote:
> I owe 12 more $85 dollar payments on a loan to my local bank. 
> If I go and pay it off today (tomorrow) it will only cost me $953.
> I have about $1500 in a normal savings account and more money in CD's
> that I could get out if an emergency occurred. 
> 
> It will cost me $6 in interest a month to pay off the loan at $85
> payments instead of just going in and paying it off. Is it smarter to
> just pay off the loan or to keep the money in savings and just make the
> payments? 
> 
> I looked on the internet and couldn't find a good answer.  
> 
> Jerry Gamblin 
> Network Security Specialist 
> Linn State Technical College 
> One Technology Drive 
> Linn, MO 65051 
> EMAIL:PROTECTED 
> www.linnstate.edu 
> 573-897-5240 
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