Paying Off Auto Title Car Loan Isn’t Only Way To Use Tax Refund

Paying Off Auto Title Car Loan Isn’t Only Way To Use Tax Refund

When you’re struggling to pay off an auto title car loan, a big tax refund can be such a great blessing. You don’t want to waste it on frivolous things. Be smart about your use of your refund to maximize your sudden windfall.

The first thing to consider is paying off your auto title car loan. Don’t just use it make a regular payment, but pay off the entire amount. An auto title loan has such high interest rates, using your refund to pay it off early will save you quite a bit of money just in interest. Plus, you’ll no longer have to worry about losing your vehicle.

Having to take out an online auto title loan indicates that you don’t have much in reserve for emergencies. Putting your refund, or at least a portion of it, into a savings account will help you be prepared for the next time an unexpected expense arises. This will reduce the chances that you’ll need another auto title auto loan in the future.

If you had to take out the car title loan because your credit cards are maxed out, consider using the refund to pay off the credit card debt. This will provide you with available credit in case of an emergency as well as save you on the interest being charged on that debt. It also will improve your credit rating, since your score is partially based on what percentage of your credit card limit is used.

Pay off auto title car loan then invest in your property with tax refund

You also could use the refund as an investment in your properties to save you money in the future. For example, you could use it to make improvements in your house that are more energy efficient, such as better insulation, windows that insulate better, solar panels, a more energy-efficient roof, or even a furnace, air conditioner or major appliance that is more energy efficient.

You could make repairs to your car that will make it more fuel-efficient as well. Also, if your house or car or showing signs that it will need to be painted pretty soon, use the refund to pay for a new paint job to improve the longevity of your property and prevent having to pay for a paint job when you don’t have the cash on hand for it, which could lead to another auto title car loan.

Another option would be to use the refund to get more insurance to protect yourself from future emergencies. This could include purchasing flood insurance or liability insurance for your home. You could use the refund to build up your health savings account if you have one already set up.

When you do get a big refund, you want to use it as an opportunity to review your tax withholdings on your paycheck. While it is nice to get a big refund, it isn’t the smart thing to do.

A refund isn’t the government paying you money. The government is just returning the money you paid to it. In essence, you are loaning money to the government free of interest. When you are struggling to pay off an auto title car loan, why would you want to loan money for free?

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