What should I do having $40K saving with existing $17K reno loan 4.44% p.a. and $25K dealer car loan? Should I invest into any market to generate ROI more than 5% instead? thank you in advance? - Seedly
 

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Asked by Anonymous

Asked on 23 Jan 2019

What should I do having $40K saving with existing $17K reno loan 4.44% p.a. and $25K dealer car loan? Should I invest into any market to generate ROI more than 5% instead? thank you in advance?

What should I do having $40K saving with existing $17K reno loan 4.44% p.a. and $25K dealer car loan? Should I invest into any market to generate ROI more than 5% instead? thank you in advance

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Jonathan Chia Guangrong
Jonathan Chia Guangrong, Fund Manager at JCG Fund
Level 8. Wizard
Answered on 23 Jan 2019

Is your cash flow able to cover the loan repayments for both your reno and car? And how confident are you to achieve 5% returns with your investments? If you are not confident consider paying down or redeeming the loan with the highest interest to give you some breathing room first. Then work on the other loan before building up some emergency funds and eventually going into investing.

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Why not pay off the reno loan? By paying off the reno loan, you actually saved 4.44% in interest.

Pay off the 25k car dealer loan and you can save more interest.

Without debt, you can invest future capital without any worry about not being able to pay loans.

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