<prompt> Human: Im being overly paranoid and posting from a throwaway rather than my normal account. My dad just died and left little behind but did have a small life insurance policy of 10,000. This should be a simple question, but I have no experience to call upon. She owes 60,000 at 5 fixed 30 yr on the house they purchased together and 10,000 on her car at 0.She would like to use the money to pay down either the house or the car, In my mind she should put everything towards the house since she is paying interest on it and continue making her monthly car payments as is. Im afraid I am missing something, am I missing something? Is it a simple as writing a large check to the bank in lieu of this months normal house payment?  <response>: I would actually do neither and keep the money in the bank to boost your emergency fund. If she is set, and this is just extra money, then it should go towards the house. There is no point in paying of a 0 loan early. 