Should You Pay Off Your Car Title Loan with Your Tax Refund?
As we approach the upcoming tax season, many will begin thinking about what to do with their tax refunds. It is wise to begin planning now; otherwise, it’s easy to spend the money frivolously. You can use your income tax refund to do a number of things including making investments, paying off a credit card, or paying off a car title loan balance. Here are some ways to use your tax refund wisely.
Pay Off Credit Cards
If you are like most American households, you have a balance on at least one credit card. When you receive your tax refund, use it to pay off or, at least, pay down the balances of the credit card(s) with the highest interest rates. Pay off the card with the highest rate first, the next highest second, and so on to get out of debt.
Pay Property Taxes
If you are a homeowner, you must pay property taxes. In most municipalities, you pay taxes twice per year. Using your tax refund, you may be able to pay your current tax bill and save the rest for the second installment. It is not the most exciting way to spend your tax refund, but paying property taxes prevents you from dipping into savings or borrowing to cover them.
Pay Off Your Car Title Loan
If you took out a car title loan from Embassy Loans, it is wise to pay the balance off and save money. By paying off the loan, you stop interest payments and eliminate a major financial burden. With the loan paid off, you free up cash to put toward other debt, savings, or even a well-deserved vacation.
Invest Your Tax Refund
You could start a college savings fund for your children with your tax refund. As the cost of college continues to rise, a 529 Savings Plan allows you to invest tax-free in your children’s education.
Alternatively, you could start your own emergency savings fund. Every household should have an emergency fund with three to six months’ worth of wages or salary. In the event of an emergency, this money can help a family get through a job layoff or unexpected expense.
Use Your Refund Wisely
Whatever you decide, spend your tax refund wisely. Take care of obligations first. With any leftover funds, you can still enjoy a little reward for yourself.
If you’re ready to free yourself from debt sooner, contact Embassy Loans. You can apply online, use our contact page, or call (833) 839-2274 for fast assistance.
