Should I pay Kubota Credit Corp off or make payments?

[JOHNTHOMAS]

I've sold or selling my rental property and will be receiving some cash that I could pay Kubota off at one big payment or should I continue making monthly payments?
BX25 $ 158.66 Mo till 8-15-13 Total Owed or Payoff $ 3173.08
F3080 $ 357.50 Mo till 6-09-14 Total Owed or Payoff $10367.50
RTV1140 $223.43 Mo till 11-19-15 Total Owed or Payoff $10501.41
B2320 $156.47 Mo till 04-05-16 Total Owed or Payoff $ 7979.77
Total one time Payoff payment $32021.46 or Monthly payments of $896.06 till 8-15-13 then $737.40 till 6-9-14 then $379.90 till 11-19-15 then $156.47 till 4-5-16.
Now the total of the monthly payments if paid monthly per the above schedule is $32021.46 with the last payment being made on 4-5-16 which means I can now turn over $32021.46 and make no further monthly payments or I can put the $32021.46 into a Savings account or buy chickens or cows or pop/soft drinks and then sell or withdraw some monthly and make the monthly payments.
There are no tax benefits or consequences by either paying it off now or monthly since there is no interest (and no longer have a Business/ never farmed) and the total payoff is the same amount by paying $32021.46 now or stretching it out till 4-5-16.
I could even pay like $28000 on my house which would save me from paying 3.75% interest on the $28000 and probably take 5 to 6 years off of my house payment.
Now I know there are those that say there is no such thing as 0% percent interest but I have always and still disagree with them. I guess I'd like to hear from them now as to what they think I should do.
Any other suggestions?

 

[creekbend]

Since it appears that you are keeping excellent records in regards to you expenses, you should be well aware of your financial status concerning financial stability. You will most certainly receive many different suggestions. My only suggestion is that, if it were me, I would confer with my Wife, that is if you are married. Your profile mentioned Grandchildren. The money belongs to the both of you. One thing that I have learned over the years, is that money is easy to spend but hard to earn and accumulate. It is your and your Family's future at stake, not anyone else's. Here's wishing you the best in finding the best solution and making a decision that is favorable in regards to your future. Future emergencies and loss of one's current health status are also viable concerns.

 

[bp fick]

John, if these Kubota notes were like a long term, interest oriented mortgage, this decision would be a no brainer. Pay it off.

However, since there is ZIP savings in paying them off, why? They are short term, relatively speaking, and in 5 years, they are gone anyhow.

That is one HUGE chunk of cash and no way, no way I'd use real estate earned capital to pay off depreciated items on short term, zero interest notes. Should an emergency or health issue arise, these toys can be liquidated in reasonable haste.

The cash? Keep it. Invest it. Put it to work in a safe instrument of some kind, my friend. Take the dividend on that investment over the long term. Best regards and stay healthy and may the Good Lord bless you.

 

[rjwerth]

If you are indeed paying no interest on the loans, then there is no financial benefit to paying the loans off early. As it has already been said, invest your money into something else or at the very least, pay off another loan (even if it is your mortgage) that you are paying interest on.

Assuming that you already have at least 6 months of expenses in liquid form, keeping more money than that in banks these days is useless.

 

[murphy1244]

If the interest is 0%, Don't. Pay off your highest interest bills.

 

[namesray]

not absolutely sure in your case, but pretty sure: while you are making payments through kubota credit corp, there is insurance required on the equipment not paid off yet. if you chose to go through the kubota insurance, then as long as you are making payments, the equipment is insured. my rtv will be paid off this may. i could finish paying it off now, but i like to keep the insurance the same for now and i never know what might pop up in life. (i just had to put a new engine in my 2004 gmc sierra=216,000 miles. glad i had some extra cash to get the engine put in.) so if you don't mind remembering to pay each month, my suggestion is to just keep making the monthly payments. good luck with whatever you decide.

 

[jdonovan]

If it was just a question of the loan payments, from a simply financial stand point its easy math.

With inflation todays $1 is worth more than next years $1, so the fixed payment will become 'less' in terms of goods/services it can buy in the future, so your effective payment becomes less.

If canceling the insurance because financing was payed off, would you replace it with another insurance policy?

I don't know what your cash reserves are, but you may find another use for the large sum you would use to pay off the tractors.

There is some piece of mind that comes with not having to write a check every month.

 

[MF 1532]

I would put the money on the mortgage , stopping interest . Keep paying normal payments , end debt early . You are in a good position whatever you decide . :thumbsup:

 

[Cat_Driver]

Think outside the box.
Paying off zero interest loans is a waste of good cash. Paying advance house payments to save 3.7% interest is again a waste of god cash.

Cash is always king, and by having that cash you can flip things and turn that cash into more cash.

People are selling items at huge loses now, so with cash you can but items ( take your pick on the items ) and resell them. You can make at least 20% profit on the cash you spend.

even if you made only 5% in the "flipped" items you are making more than paying money on the house or paying off 0% loans. Just searching Craigs list you can make more than 3.7%.

Example. I just flipped a Class A Motorhome from craigs list. The lady wanted 20K I offered 18K, and she took it, I checked all the fluids, washed it. checked all the system, used it for a 10 day vacation and sold it for 25K on e-bay. I did it all in four months. I made a lot more than any bank would have made me. Just what I saved using it for vacation would have been a sweet profit.

Heck if you really want to think outside the box. But another home and rent it out. The profits from the rental can go towards your current home.

You need money to make money, and since you have money - put it to work.

If Gold was still climbing I would have said buy hard metals as they were going up fast, but they leveled off.

 

[crazyal]

Come on, this is John Thomas, the only sensible thing to do would be to buy a new Kubota. :laughing: If it was me I think I would further into paying off a chunk of your mortgage. Unless you were using the money from rental to make the payments and now you no longer have it coming in or if the amount of loan payments has you strapped for cash each month, then I might pay off one or two of the Kubota loans. For me I would rather have the peace of mine of having my house paid off.