Dave Ramsey says: Pay off car note, then enjoy freedom from debt

Pay off your car loan if you've got the savings to pull it off. With the money you’d free up, you could rebuild your savings in no time.

BY DAVE RAMSEY

Sep 20, 2020, 4:45 AM

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Dear Dave,

My only debt right now is a car payment. I still owe $12,000 on the vehicle, and currently I have $25,000 in savings.

I’m in a very stable line of work, but my income can vary somewhat from month to month. Should I hang on to my savings, or pay off the car?

– Erik

Dear Erik,

Debt is a bad thing to have in your life, especially when your income can vary from paycheck to paycheck.

You’re in good shape, except for the car note, though. It’s like a ball and chain around your neck.

You’d still have $13,000 left if you paid off the car. And with the money you’d free up, you could rebuild your savings in no time.

Pay off the car, dude!

— Dave