Return items to payoff debt?
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  1. #1
    RCD
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    Default Return items to payoff debt?

    Hello everyone,

    Awesome forum here, first time poster, long time reader.

    I currently owe $5,700 on my car with a $452 monthly payment at 18% APR and no other debt including mortgage. I recently lost my job but have 4 months living expenses and will easily find another job in a month and make about $3,200 per month net income once I receive said job with a monthly budget of $1,100 including the car payment.

    My question is, I purchased some backpacking gear a little before I lost said job, I did the math and if I returned all of the gear and combined it with my current funds I could pay off my car loan and still have about 3 months living expenses. I have used some of the gear once but it’s still eligible for return so I would get 100% of my money back Should I return my gear and pay the car off now or just keep using the gear and just pay my car off over a few months?

    Thanks in advance everyone!

    PS before I lost my job I planned on going backpacking every weekend,

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    Definitely do NOT use your available money to pay off the car, that $5700 is your safety net in case it takes a while to get the new job - or in case of anything going wrong.

    As for returning the backpacking gear, no, don't do that either - it's not that much money (a few hundred) and you would have to repurchase it later anyway.

    But one thing stands out that you could fix. That 18% rate is toxic and from what you say, your credit must be decent? Could you go to a credit union and refinance that car for about 36 months at 5% or 6%? That would cut your payment to about $175/m. And give you some extra money to invest in a 401k or IRA. That saved $452 minus $175 adds up to about $10,000 in 3 years. And you'd pay less interest too.

  3. #3
    RCD
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    Thanks a bunch for the response. The backpacking gear values at a little over $3,000 (its alpine/mountain climbing gear).

    Thanks for the advice, I’ll just sit back with what I currently have until I get a job. I have rare experience so pretty sure I’ll have a job by this Monday..

    My credit is at 540 range due to some stuff that happened 6 years ago but should be falling off my credit shortly. I’d rather just pay it off ASAP and that’s my plan once I got the job.

    Thanks again for the advice!

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    Would be OK with returning the camping stuff if you keep the money for living expenses or just accept a credit to reduce credit card balance. It's good amount of money...I would otherwise de-junk the electronics and any expensive collections/hobbies, sell what you can via email or Craigslist. Can also clean up any toys like RV, boat, ATV and check out the sale market if you want...

    Do you live in city? Craigslist gigs has LOTS of day work in some places and weekend event work. Is lower scammer rate now on these ads as Craigslist requires credit cards to post jobs/gigs....Always saved my butt when I was short or couple times when I walked away from troubled work situation. Other choice is doing some focus groups where you just give your opinion on products, services or advertising and paid immediately. These are listed on Craigslist > Jobs > ETC. Is nice way to keep self buy while unemployed...Can find some good workouts on Craigslist like helping people unpack from moves or organizing, yard work and also some interesting work like roadie for music events.

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