A 24-year-old caller to The Ramsey Show got a lot more than he bargained for when he revealed the story of how much he owed on his car loan (1). Noel from San Antonio, Texas, called in to ask if his financial situation was fit for buying a home. But the conversation took a sharp turn once he mentioned his car payment was $1,200 a month. Dave Ramsey and co-host Rachel Cruze immediately told him he shouldn’t buy a house unless he paid off the car or sold it. The duo followed up by asking questions about th ...

Stretching your loan over more years might seem like an easy fix for lowering your monthly payment. But it comes with plenty of drawbacks. Watch out for these pitfalls before borrowing a six-year car loan. Greater Risk of Overspending Since lenders underwrite based on cash flow, often they’ll lend you more money if you borrow a longer loan. That means you can theoretically spend more on a car, even though you’d be better off spending less. Explore More: 7 Critical Checks Before Buying a Used Car, Accordi ...

Core Insights - The article emphasizes the importance of understanding different types of debt and suggests strategies for paying it off effectively in 2026 Group 1: Understanding Debt - Not all debt is equal; categorizing debt into "less ideal" and "necessary" helps in deciding repayment strategies [2] - "Less ideal debt" includes loans for depreciating assets or high-interest debt, while "necessary debt" pertains to loans for appreciating assets or future income [2] Group 2: Repayment Strategies - Credit card debt should be prioritized for repayment due to its high interest and non-deductibility at tax time [3] - The snowball method, which focuses on paying off the smallest debts first, can be motivating for some individuals [3] - The avalanche method, which targets the highest interest rates first, is recommended for those looking to minimize interest payments [4] Group 3: Tax Considerations - It is crucial to consider the tax implications of debt; some interest is tax-deductible while others, like credit card interest, are not [5] - For example, mortgage interest can be deducted if itemized, up to $750,000 in mortgage debt [5] - Evaluating balance transfer cards involves weighing fees against potential interest savings [6]

Financial Situation Overview - A single mother from Lexington, Kentucky, named Charlotte, struggles financially despite working two jobs, earning approximately $3,200 monthly while managing inconsistent child support [1][2] - Monthly debt payments total around $1,900, which includes a $560 mortgage, indicating a tight financial margin [3] Debt Breakdown - Charlotte's debts include $16,000 for a car loan, $16,000 in student loans, $6,000 in medical bills, $3,200 for braces, $1,600 from a cruise, $700 for tires, and $200 for a mattress [4] - The accumulation of these debts has made it challenging for her to stay current on bills and start an emergency fund [2][4] Financial Advice and Recommendations - Personal finance expert Dave Ramsey emphasized that Charlotte's financial situation requires major changes rather than minor adjustments, suggesting that selling her car may be necessary due to affordability issues [6] - Ramsey pointed out that Charlotte has been living on the financial edge for a long time, which has contributed to her current stress [5]

Core Points - The new tax deduction for car loan interest applies only to new cars assembled in the United States, excluding leases and used car loans [10][12][14] - The deduction allows taxpayers to deduct up to $10,000 in car loan interest, potentially resulting in tax savings ranging from $300 to $900 for many new car buyers [12][13] - Higher-income households may face limitations on the deduction, with phase-out thresholds set at $150,000 for single filers and $250,000 for joint filers [17][18] Group 1: Tax Deduction Eligibility - The car loan interest deduction is only available for loans on new cars with final assembly in the U.S., and it does not apply to leases or used car loans [10][14] - Taxpayers must include the Vehicle Identification Number (VIN) on Schedule 1-A to claim the deduction, and the VIN must be accurate [27][29] - The deduction is available for tax years 2025 through 2028, but it may not cover the entire duration of a car loan [14][16] Group 2: Leasing and Financing Trends - Leasing is particularly popular in states like Michigan, where nearly 53% of new vehicles sold in Q3 2025 were leased, compared to 5% or fewer in states like Alaska and Arkansas [3][4] - Many consumers are trading in vehicles with negative equity, which complicates the deduction process as interest on negative equity rolled into new loans is not deductible [20][22] - The average amount owed on upside-down loans reached a record $6,905 in Q3 2025, indicating a growing trend of negative equity among new car buyers [23] Group 3: Documentation and Compliance - Taxpayers should prepare documentation early, including original loan agreements and interest statements, to facilitate claiming the deduction [26][34] - Lenders are expected to provide a vehicle loan interest statement (1098-VLI) starting in 2026, but for 2025, this is optional [32][33] - Proof of personal use of the vehicle is required to claim the deduction, with more than 50% of the expected use needing to be personal [36]

Core Points - The One Big Beautiful Bill Act introduces a tax deduction for car loan interest, allowing eligible taxpayers to deduct up to $10,000 from their federal taxes for tax years 2025 through 2028 [2][14] - The deduction is an above-the-line deduction, meaning it can be claimed regardless of whether the taxpayer itemizes deductions or takes the standard deduction [2] Eligibility Criteria - To qualify for the full deduction, single filers must have a taxable income not exceeding $100,000, while married couples filing jointly must not exceed $200,000; the deduction phases out for incomes above these thresholds [3] - The vehicle must be for personal use, purchased new after December 31, 2024, and have its final assembly location in the U.S. [7][16] Calculation of Deduction - The deduction is based on the interest paid on the car loan, not the total loan payment; for example, if a taxpayer paid $2,418 in interest, this amount would reduce their taxable income, not their tax bill directly [8][10] - Taxpayers must file Schedule 1-A to report the deduction, including the amount of interest paid and the vehicle's VIN [12][15] Additional Information - Electric vehicles qualify for the deduction if they meet the same criteria as other vehicles [16] - Business-related car loan interest deductions are also available for self-employed individuals or business owners, following existing rules prior to the OBBB [18][19]

If you're planning to borrow or refinance a loan soon, you may be wondering what's in store for 2026. While nothing is set in stone, experts expect loan rates to decrease slightly in 2026 — but not dramatically. Interest rates are unlikely to return to the rock-bottom numbers of a few years ago, but even a modest decline could lower your borrowing costs. A rate decrease could save you hundreds or even thousands of dollars in interest charges on a personal loan, car loan, or student loan. Understanding wh ...

Core Viewpoint - The Odisha High Court ruled that a bank cannot unilaterally deduct money from a pensioner's account to recover dues from a borrower's default, emphasizing the protection of pension funds as a fundamental right under Article 21 of the Constitution of India [7][24][27]. Summary by Sections Case Background - Mr. Mallick, a retired employee, acted as a guarantor for his wife's loans totaling Rs 21.35 lakh, which included two transport vehicle loans and a car loan [2][3]. - The loans defaulted, leading to their classification as Non-Performing Assets (NPA) on November 7, 2018 [3]. Bank's Actions - The bank debited Rs 5 lakh from the joint account of Mr. Mallick and his wife without prior notice, claiming it was to settle the defaulted loans [4][5]. - The bank argued that the joint account was not solely a pension account and that Mr. Mallick had been withdrawing his pension regularly [6]. Court's Findings - The court highlighted that pension funds are protected under various legal provisions, including Section 60(1)(g) of the Code of Civil Procedure, which exempts government pensions from attachment [9][27]. - The court ruled that the bank's action of debiting the account without a court order or prior notice violated the principle of due process [13][27]. Legal Precedents - The judgement referenced previous cases, including Radhey Shyam Gupta v. Punjab National Bank and State of Jharkhand v. Jitendra Kumar Srivastava, reinforcing that pension is considered property and cannot be taken without legal authority [10][12][27]. - The court noted that pension funds retain their protected status even when deposited in a joint account, and contractual agreements cannot waive this exemption [14][17]. Conclusion and Directives - The Odisha High Court ordered the bank to reverse the Rs 5 lakh deduction within four weeks and prohibited any future deductions from Mr. Mallick's pension without due process [24][28]. - The judgement clarified that while the bank retains the right to recover outstanding dues, it must do so through lawful means and cannot directly appropriate pension funds [24][25].

Core Point - The case revolves around Smt Sharma, who faced unjust bounce charges from SBI despite maintaining sufficient funds in her account, leading to a ruling in her favor by the Delhi State Consumer Commission [18][19]. Group 1: Background of the Case - Smt Sharma took a car loan of Rs 2.6 lakh from HDFC Bank on April 15, 2008, and authorized SBI to deduct her monthly EMI of Rs 7,054 through ECS from her savings account [3][4]. - A total of 11 EMI payments bounced, resulting in charges of Rs 4,400, with three due to insufficient funds and eight labeled as "not valid" [5][18]. Group 2: Legal Proceedings - After SBI declined to refund the bounce charges, Sharma filed a complaint with the district consumer commission in 2010, which was dismissed, prompting her to escalate the matter to the National Consumer Disputes Redressal Commission (NCDRC) [2][7]. - The NCDRC remanded the case back to the Delhi State Consumer Commission, which ultimately ruled in favor of Sharma on October 9, 2025 [18][19]. Group 3: Findings of the Delhi State Consumer Commission - The Commission found that SBI's argument regarding incorrect ECS mandate details was implausible, as some EMIs were successfully cleared under the same mandate [12][16]. - SBI failed to provide evidence to support its claims of insufficient funds or incorrect ECS details, leading to a conclusion of deficiency in service on SBI's part [11][14][16]. Group 4: Compensation Awarded - The Delhi State Consumer Commission ordered SBI to pay Rs 1.7 lakh to Sharma, which includes Rs 1.5 lakh for mental agony and Rs 20,000 for litigation costs, to be paid within three months [19].

Core Insights - A former commercial real estate credit analyst is facing severe financial difficulties after losing his job, leading to a desperate situation where he is managing multiple debts and trying to survive on minimal income [1][2]. Financial Situation - The individual previously earned $130,000 annually, while his spouse continues to earn the same amount, but his income has drastically dropped to nearly nothing due to job loss amid $2 billion in loan defaults [2]. - The total mortgage obligations amount to over $1.36 million, with total debts likely closer to $1.8 million when including car loans and credit card debt [6]. Property Details - The financial breakdown includes: - Primary home: $540,000 mortgage at 5.75% with a monthly payment of $4,400 [7] - Rental 1: $453,000 mortgage at 6.5% with a monthly payment of $2,956 [7] - Rental 2: $192,000 mortgage with a monthly payment of $1,119 [7] - Rental 3 (with a business partner): $184,000 mortgage at 11.5% [7] - The individual is considering selling assets, including their primary home, and has listed nearly everything for sale, including their car [3][6]. Proposed Solutions - The individual proposed a deal where a potential buyer would pay $20,000 upfront and take over the mortgage, while he would remain on the loan, which is not a viable solution due to the due-on-sale clause in the mortgage [3][4][5].