We helped our daughter buy a 2013 Honda CRV earlier this fall. At the time, she didn't have income, nor much credit, so my husband cosigned a loan for her. The interest rate was a horrific 10.24% because of her lack of credit. Apparently it would have been higher if he wasn't on the loan. The plan since then was to pay it off within 15 months to reduce the interest rate.
Our daughter now has a job and has moved to another state where she will need title to register the vehicle. The process seemed a little cumbersome with a lien on the title between our state and her state. Today, I decide to pay it off in full to get the lien removed for easier transfer.
The downside, less cash in our savings account. The plus side is saving thousands in interest, plus the gap insurance will be prorated and returned to us as well. And no debt on that car.
I will be making a plan to pay ourselves back the money we moved from savings over the next year. This is in alignment to have the loan paid off by the end of 2024. It feesl good to pay off this debt!
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