Yes! We did it! We paid off our car loan.
We’ve had this idea of paying our car loan for a long time. Ever since we decided that we wanted to get a new house. Sometime last year, I visited a banker to explore the idea financing our new house based solely on my income instead of the combine income of Dear2 and I. This is to keep Dear2 financially ‘open’ to future investment options. To cut the long story short, the banker advised that I have to pay off my car loan and cancel most of my credit cards to be in line with the new TDSR policy.
Earlier this year, I called up Maybank to enquire about the settlement amount. I can’t recall the amount right now but it would save me roughly $20 to settle it then. However, the only Maybank branch to repay a car loan is at Textile Centre, and they only open on weekdays and closes at 2pm. It was sort of inconvenient to visit their branch. Since we were only intending to start house hunting later this year, I decided to repay the car loan at a later date.
Earlier this month, I called again to check the settlement amount. In absolute terms, it was of course a smaller amount at $6559. However, it was $43 more than if I let the loan run its course ($6516). This was mainly due to a component called the early settlement fee. Oh no. If I delay any further, the disparity will only increase. With renew motivation, I visited Textile Centre last week over my lunch time to pay off our car loan.
I immediately SMS Dear2 to announce that we are debt free.
It felt like a big burden lifted off our shoulders. Now, with both of housing loan and car loan paid off, we are one more step closer to our dream of a new property. On a monthly basis, we will also see more positive cash flow in our accounts which will likely translate to higher savings. To be debt free at the age of 33, we felt delighted and fortunate.
The next step will be to cancel any unused credit cards that I have. Meanwhile, build up our savings and be ready to enter the market.