How everyone feel about paying off stuff with 0% interest early just to get the payments done? Pointless or good idea?
1. Pay down debt costing you interest before you pay down 0% interest debt.
2. Is your debt really 0% or did you pay an origination fee? i.e., did $10k at 0% interest cost you $400? If yes, that's actually a 4% "interest" up front. But it's a sunk cost, so too late now.
3. Are you maxing out any employer-matched savings plans? (I know you're Canadian, and I don't know what the private pensions are in Canada vs. provincial / national plans.) Before I'd pay back 0% interest, I'd max out any employer plans where they will match your contributions up to a certain maximum %. After that point, I'd continue to contribute to those employer savings plans beyond the max match, if your contributions continue to be before-tax, thereby reducing your total net tax and increasing your total net pay.
4. After that, I'd pay off 0% debt if you know you're at risk for having the cash flow to do so down the road. i.e., if you have $10k at 0% interest which must be paid in full by e.g., April 2019, else interest will become due, and you don't have the cash in a liquid investment (savings, easily salable stock, etc.) and you're concerned you could lose a significant portion of your monthly cash flow (job loss, job furlough, loss of substantial overtime), then I'd consider paying down the 0% loan more aggressively, or paying it off.
5. If it's a vehicle loan, that's a tougher call, because the vehicle is going to keep depreciating. If you think you can sell it at some point for a reasonable return, you may want to delay paying off the 0% interest, because you'd be paying it off in future dollars which in concept are worth less in an inflationary environment. But that might be more headache than some people want to entertain.
6. If you're savvy at investing, and/or you believe taking the monthly payment, or the monthly excess payment if desiring to pay it down faster, can get a positive return in the market over the same timeframe, I'd consider investing the payment or at least the "extra" payment, and then paying off the loan when it is truly due. However, I probably wouldn't do that if I didn't have some dry powder cash/savings sitting around. I also probably wouldn't do it if I had young kids or a strong possibility of incurring an uncovered medical expense (which may be more of an American risk than a Canadian one).
7. If you don't have good (enough) insurance, I'd consider beefing up your insurance with some or all of that monthly "extra" payment, rather than paying down the loan as fast as you can. If you're young/single/no kids, though, I'd probably ignore and pay it off.
8. Another option is to get a loan with interest, where the interest is deductible, for the principal amount of what you still owe, and insuring the payment will be less than or equal to what you pay now. With the interest deducted, it would be a net annual greater cash flow to do it that way, but that's a unique set of hoops you'd need to jump through to have that circumstance work out.
