and if so when is too early?
Lets say i have a car loan for 5 years at about $400 a month. Is it bad for my credit to pay it off too early? OK, lets all take a visit to http://www.myfico.com and study their educational materials, ok?
Your credit score is made up of a number of components. The fact that you have a secured auto loan looks wonderful. Nice start.
Another component is the history, or how long you have that account open. Therefore, if you paid it off over the entire term that will look good on your credit score.
BUT you are also paying out a huge amount of interest payments.
So my opinion.....unless this loan has an extremely low interest rate (my last one was only 2%), it would be to your advantage to pay it off after 6 months, save the interest, and put that 6 months worth of payments on your credit report. It will not hurt your sore at all by paying it off early, but you lose a little but from not having a long payment history.
To fix that, use the money you are saving from the interest payments and just take out another loan for something small, like a TV or some inexpensive item. Pay that off after a few months. You now establish another line item on your credit report and some more history.
Lets say i have a car loan for 5 years at about $400 a month. Is it bad for my credit to pay it off too early? youd at least want to wait a year or two to show your responsible to cover the car payment..a car loan is the best way to improve your credit score so you would want to keep it open as long as possible..as long as you are making the payments
Lets say i have a car loan for 5 years at about $400 a month. Is it bad for my credit to pay it off too early? Early pay off is always a plus for your credit report
by the way, keeping a loan open is only putting interest money in the lenders pocket, Of Course they want the loan to continue as long as possible.
Lets say i have a car loan for 5 years at about $400 a month. Is it bad for my credit to pay it off too early? No but watch out for the prepayment penalty.
Lets say i have a car loan for 5 years at about $400 a month. Is it bad for my credit to pay it off too early? You protect your credit and ensure a good credit rating by paying your bills on time. That's all it takes. You should be more concerned with managing your finances properly. If you can pay off your car loan early, you will save on future interest payments, and will therefore be better off. If there is no prepayment penalty, pay off the car and don't worry about your credit. Paying off the car will show that you are responsible in paying your debts.
If there is a prepayment penalty, instead of paying off your car early, make the biggest payments possible without incurring the penalty. That will also reduce your interest cost. The point is, you should do what is best for you financially. Your credit will always be good if you don't default on payments or incur late payment penalties.
Lets say i have a car loan for 5 years at about $400 a month. Is it bad for my credit to pay it off too early? No, and you will save hundreds, and possibly a few thousand dollars in interest, by paying it off early.
You can always use credit cards, by paying off the balance each month, to build your credit. When I was young I used simple expenses such as gas or small grocery visits, and went home and directly wrote a check for them....even if it was several times a month! You don't need to wait for a bill.
When I bought my first car, on my own, I had no problems getting an excellent rate.
Save money, whenever you can...that is the SMART way to use credit.
I wish you luck! Sounds like you are extremely responsible.
Lets say i have a car loan for 5 years at about $400 a month. Is it bad for my credit to pay it off too early? It won't hurt your credit to pay it early, but I'd keep it for 18-24 months-that will be great for your score. Take the cash, set up a bank account, and have the monthly payments automatically sent so you'll never be late.
Lets say i have a car loan for 5 years at about $400 a month. Is it bad for my credit to pay it off too early? It depends. Do you have any other debt? If not then it will hurt your credit. I work for a finance company and I see people all the time come in and dont owe anybody and they dont qualify for a loan. If you dont owe anybody then you dont have any credit. Paying it off early doesnt show that you are responisble, (For credit reporting reasons), but if you make you monthly payments it does. What really helps your credit is when you have have a high credit limit and a low balance. For instance, if you have a credit card that have a 5000.00 limit and you have only 1500.00 balance, this will help build your credit score. Another example is a car loan, if you financed the car for 15000.00 and you only owe 4000.00 this will help increase your score. You should do one of two things. Pay a big payment leaving you with about 12-18 months to pay on it. This will save you lots in interest. Or if your rate on your loan now is pretty high. You can take the money that you have to pay it off with and put in a CD, get about 4-5% interest on it. Then get a loan against your CD. Usually if you have a good relationship with your bank they will give you 1% over what they are paying you on your money. So if you they pay you 4% then you pay them 5%. But in the end you make more interest than you pay because the loan balance is gong down each month but the CD Balance is going up each month. On 15000 at %5 for 5 years you will pay about 2000 back in interest, but the 15000 in a CD at 4% for 5 years will gain about 3250.00. I hope this helps!
Lets say i have a car loan for 5 years at about $400 a month. Is it bad for my credit to pay it off too early? its not necessarily bad, but it is better to let a long loan stay long. these are what establish a payment pattern. you can pay extra and end it early, as in months early, but not years. also, you might check your loan policy because you can get hit with a penalty if you pay it off TOO early. they want the interest and WANT you to take 5yrs.
Lets say i have a car loan for 5 years at about $400 a month. Is it bad for my credit to pay it off too early? pay it off early by all means...the amount that you owe on your car (debt) works against you on your credit score. your car does not build any equity, nor does it come with a credit line. so ontime payment show that you are responsible, but the debt hurts your outstanding debt to available credit percentage. this accounts for 25% of your fico
Lets say i have a car loan for 5 years at about $400 a month. Is it bad for my credit to pay it off too early? a quick web search came up with lots of results but this is the best one i could find for you.
Lets say i have a car loan for 5 years at about $400 a month. Is it bad for my credit to pay it off too early? No it's not. Most companies dont like for you to pay off early as they will not make that extra 15-20,000. off of you. If you can afford to dbl and trpl the payments-go for it.
