SwordfishTough t1_ja74zs6 wrote on February 27, 2023 at 9:51 AM

Treasury bonds are paying more than 4% without the risk of the stock market and you get to avoid some taxes on the interest. High yield savings accounts are in the same range and even after taxes are probably higher than 3.48%, also risk free.

You're not going to get rich off this level of arbitrage though so if it gives you peace of mind to pay down the car, do that. Long term optimization would probably be to keep the loan as is and make some diversified ok investments.

GTTMR t1_ja784os wrote on February 27, 2023 at 10:37 AM

Thanks, that's an interesting idea. So it's a matter of the ROI via bonds/HYSA or the return once the loan is paid off? My payments are $357/mo, but once the loan is gone those funds will be available for something else. There is also the unknown of how long interest rates will remain this high.