Engaro
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For the most part, I think that it's a bunch of BS. Banks want to make money off of you, but they also want to see that you will actually pay them their money back.
Some banks do have fees if you pay back loans too early. If I were you, I would not listen to your dad, I would go to the bank, find out if there are any fees for paying up early, and if not...pay the loan off. Who cares if they won't give you 5 stars for paying them lots of interest? They can't give you BAD credit for it. |
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edco
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Dad is wrong.
Anytime you can pay down debt is a good thing.
Life is not only about credit scores. it's about really OWNING what you want and have. And there is something wonderful when you get in your car knowing it's yours, and you dont owe anyone a cent.
You cant hear it but I am applauding you right now !! |
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RosePrincess
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It is a bunch of BS. It will definitely help you with both your credit score as well as with your debt. I think you have a great head over your shoulders and are making the right move. Good for you! :) |
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clever girl
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It does not hurt your credit, and you save interest. Actually, in the long run you will higher your credit score. Dad is wrong. |
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Sam M
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the banks don't love losing the interest, but they do increase your credit rating. This puts you in a good position for the next time you want a loan.
And congrats on being a good money manager! |
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Andy H
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CareBear,
Pay the car off.
Credit companies want to see that you don't miss any payments.
They want to make sure that you're worth their time and that you're responsible with paying back THEIR money.
Pay the car off - it'll look amazing on your credit file!
-Andy
P.S. If you get sick of the car, you can just sell it right after you pay it off and get a new car! |
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SuperCactus
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Pay off the loan as quickly as possible. The fact that you have successfully paid a loan is what improves your credit score. |
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Jennifer
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I think you dad's just jealous. That's going to look good on your credit. It will show banks that they can trust you to make your payments. |
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strgazer9113
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its a bunch of BS...keep doing what you are doing...being responsible is always the best answer and reason....good for you |
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adharris83
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BS, do what YOU do and pay you loan!!! |
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XoxoxoxoX
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Listen to yourself and not your father. He does NOT know what he is talking about. Of course the bank would like to make more interest off you, but ALL they do is report your on time payment to the credit reporting agencies. And like you know it, credit card agencies don't like to see debts that you owe. So IT WILL ACTUALLY HELP YOUR CREDIT SCORE. Got it! =)
Kudos for you by paying more and plan to pay it off 18 months earlier. You are doing awesome. |
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STEVEN F
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If you don't have DEBT, you have MONEY (which you are no longer using to make payments). If you have MONEY, you don't NEED a credit score. NEVER borrow for anything except a house. You CAN get a mortgage WITHOUT a FICO score as long as there is nothing negative in your credit file. |
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wilsonkeith
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It is BS, do not pay the car off and this is why: Let's assume you are paying 3% interest on the loan and you can get 4% interest in a savings account or 8% in a 401k. That extra money you are spending on the car only earns you 3% interest savings, whereas not using those funds for the car will earn you 1% and/or 5% savings over time. |
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thebigm57
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Sometimes parents are wrong...In this case dad is wrong. You continue doing what you're dong...All the credit company is looking for is missed payments or late payments. They don't care weather you accelerate the payments, however, if you had paid less than 6 months on the loan than paid off they would take a dim view and your score would go down. The reason for this is they want you to have a "history" of paying consistently and regularly...In other words you reflect to them that you're a responsible person. The time frame is pretty arbitrary...but it's usually minimum 6 months that you need to be paying for it to effect you positively.
Remember that having credit is a privilege and DON'T abuse it. PEACE! |
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OC1999
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He is right that if you pay it off too fast it won't help your credit, but it won't hurt your credit either. Creditors like to see a few months of history to make sure you can manage your money over time.
But as long as you have at least a year of payments, by the time it is paid off, you are fine. For example if you were going to pay off a 2 year loan in 6 months, it might not help you as much as you paying off a 4 year car loan in 2.5 years. |
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WT
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The only way I see it being detrimental is if there is a "pre-payment penalty" for paying off early. |
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unojdee
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no thats good. what looks bad is putting $200 on a credit card and paying it off the next month and so on. paying off a big loan like a car that fast shows that you are a trustworthy risk. the above example shows that one week you had no money then when the paycheck comes in so you pay it off. what your doing shows you dont live check to check. |
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Tammy
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dont listen to your dad you pay it offer quicker aves you alot of money and all banks look at is that you had a loan and pay it good and were not late with payments it will increase your credit score keep paying |
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Stuart N
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BS!!!!!!!! |
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jupyter_flew
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A bunch of BS. |
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Mel
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Since interest is figured on the unpaid balance you are correct in that . No if anything would help your credit because you get the rep for always paying off loans in advance. |
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soledad
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It's a good idea if you feel that you are really going to keep your car for a long time. It will not hurt your credit. Credit companies do like when people pay their bills on time. That's what actually builds your credit. Just make sure that you can afford the payments on a long term basis. There's no better idea than to have a new car and pay it off ASAP. One less stress to your pocket. Don't you think? |
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Meme
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that is a great idea!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! |
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mysterious
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this is a good questions i was told the same thing...but it was for a credit card...going to stare are your answers... good luck |
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A D
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If you car loan is the only thing you have were you are making payments, paying it early will hurt your credit. Because when you do decide to buy another major purchase, the lenders will have nothing to look at it your credit history because you never build up anything. Loans such as a car, mortgage, is goos to just pay the minimun amount because these are good loans that credit lenders like. They are stable.
It is better to pay off your credit cards at a higher speed that just paying the minimun. If lenders see that you are using too many credit cards, they see you as a risk, and your interest rate will be higher and they will most likely decline you.
The way credit is view today, is changing dramatically because of soo many money that is being lost in the mortgage industry. And now lenders are very picky to whom they give credit to. |
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whirliekurlie
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Bad idea as far as creditors are concerned, but for you personal finances, a very good idea. |
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livinonedge13
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I think its a bad idea to post Stories as questions |
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