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.

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.

It's always a great time to invest! I'm assuming you have a decent emergency fund, so a taxable account would be the next step. I suggest low cost, tax efficient index ETFs that are different enough from what you hold in you other accounts to avoid wash sales.

Your car loan is under 4% which is low enough that you can just make the payments if you want to invest instead. You can also split the difference - a little extra to the car loan, a little to investments (easier at a brokerage that allows for fractional shares) and even a little extra to savings.

Follow the flowchart.

My generic advice:

https://i.imgur.com/lSoUQr2.png

Here is the flowchart from the r/personalfinance subreddit’s Prime Directive. If you follow that, you will be ahead of almost all of your peers.

Stop by the sidebar to see the Common Topics, which include basic money handling and investing.

You don’t need to talk to anyone or buy some random book to do this. You have all the tools right here.

I love the flowchart! Here's the wiki page with more context and information.

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Here's a link to the PF Wiki for helpful guides and information.

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This is a mild fun fact about the Roth 401(k)/IRA. It’s not ROTH as if it is an acronym, but Roth because it’s named after former Senator William Roth.

Also, Roth isn’t a noun. It describes a type of tax advantaged contributions. You likely meant Roth IRA.

Thanks.

Wasn't aware the Roth IRA was named after someone. Feels like that could be a Jeopardy question.

Despite your down votes, this is probably the path I'll take. Pay the loan off a little earlier, and also capture some of the market while it is down. Thanks.