Where to put extra money?

I have will have a nice bonus check of about $10k from work around the first year and I am unsure where to put the money. Here is my situation. I don't have much debt so thats a good thing, anyhow here is what I've got.

New car loan 35k (Interest rate is 0% for 60mo) about 600/mo
Student loan 12k (About 200/mo)
Home loan is a Jumbo at 6.5%. About 428k out standing.
No credit card debt.
No other debt besides general living expenses, i.e groceries, heat bil, diapers, etc...

So here is my question... Where do you think the best place is to put my money? Here is how I see my options. (let me know if you have any other suggestions.)

1. Put it into savings. As we all know the market is not the greatest right now and this is a "realitivly" safe investment.

2. Grab a few extra thousand from savings and pay off my student loan. Then is done and gone. However, the interest is tax deductable.

3. Use the money to pay down the mortgage to get to at least 417k and get a conforming mortgage with a lower rate.

4. Do I pay down the car loan? Its a 0% interest rate so its essentially free money, so I don't really see this one as a good optoion, although it has the highest payment outside of my mortgage.

Please let me know your thoughts. I am leaning towards paying off the student loan to get rid of it.

Thanks.

removing debt would be a good move with bonuses- lowers your expense footprint.

Make sure the $200/month you save from the loan is added to your retirement accounts or savings plans.

No. 4 is a bad idea. As you pointed out it is free money.

You should look into the options about a lower rate on your mortgage. Thats where the real difference could be.

Hi there,

I think that you are thinking quiet right and should concentrate towards paying off the Student Loan by clubbing a few extra thousand from your savings.
Home Loan would not be the right option to consider as its a huge amount and hardly would make any difference to the loan amount.
About Car Loan, as you already said, its a 0% loan, then its no use to pay for it.

All the best................

Given your high auto payments and jumbo mortgage, you might want to avoid making the money illiquid by paying a loan or putting it at market risk. If the $10000 is the only liquid cash you have, I would seriously consider putting into a FDIC High-yield savings account as a buffer (Option 1).

If you already have sufficient liquid resources for emergency purposes, I like the idea of refinancing yourself out of your non-conforming mortgage. The student loan and the car loan are most likely the cheapest money you have on the table.