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Savings v loan

  • 30-09-2020 11:42am
    #1
    Rick Dalton
    Registered Users, Registered Users 2 Posts: 19 ✭


    Hi, apologies if this is not in the correct location feel free to move. Simple query really. I have circa 30k in savings and my only debt is a car loan with circa 11k outstanding. I do not have any plans for the 30k at present other than future house deposit etc but I am 2-3 years away from moving on that for other reasons. So is it a no brainier to clear the car loan from savings now? If I save at my current rate and include the car loan repayment amount I’d estimate I would be back to 30k savings in approx 12-13 months. This would allow me maybe 2 years more of saving to get towards a target of 50k for a house deposit.

    For context I’m 28 male and in a permanent full time pensionable role. I would consider my employment to be very safe with regard to possible economic implications due to covid etc.

    I appreciate any feedback or comments.


Comments

  • #2
    Water2626262
    Registered Users, Registered Users 2 Posts: 234 ✭✭Water2626262


    Rick Dalton wrote: »
    Hi, apologies if this is not in the correct location feel free to move. Simple query really. I have circa 30k in savings and my only debt is a car loan with circa 11k outstanding. I do not have any plans for the 30k at present other than future house deposit etc but I am 2-3 years away from moving on that for other reasons. So is it a no brainier to clear the car loan from savings now? If I save at my current rate and include the car loan repayment amount I’d estimate I would be back to 30k savings in approx 12-13 months. This would allow me maybe 2 years more of saving to get towards a target of 50k for a house deposit.

    For context I’m 28 male and in a permanent full time pensionable role. I would consider my employment to be very safe with regard to possible economic implications due to covid etc.

    I appreciate any feedback or comments.

    You would save on interest however if something came up in the short term your deposit would be low. If you are certain you aren’t buying for 2 or 3 years then it’s the most logical idea to clear the loan.

    The loan itself probably won’t effect you getting your max 3.5X gross income approval.


  • #3
    EverythingGood
    Registered Users, Registered Users 2 Posts: 2,003 ✭✭✭EverythingGood


    Check that there are no penalties for repaying the car loan early.


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