12-06-2006, 08:30 PM
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#1 |
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Greenhorn
Join Date: Dec 2006
Posts: 9
Rep Power: 0  |
Auto Loan Payoff
Hi!
I have a question regarding auto loans and credit scores. Here is my dilema... I have an Auto Loan for around $13,000 which I have been paying for 12 months. I have some money and want to payoff the loan to save myself from the interest. How will this affect my credit? Will it give me a score boost? I assume it would help a little seeing that it lowers my balance. Any help would be appreciated. drew |
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12-07-2006, 08:58 AM
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#2 |
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Savings Advisor
Join Date: Aug 2006
Location: Central CT
Age: 32
Posts: 761
Rep Power: 7 |
Welcome to the site Drew.
This can go both ways. What is the interest rate on the loan? This was briefly discussed here as well: http://savingstalk.com/archives/loan...dit-score-517/ |
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12-07-2006, 11:44 PM
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#3 |
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Super Moderator
Join Date: Aug 2006
Location: West Coast
Posts: 773
Rep Power: 7 |
two points....
1)don't pay off the loan if you have a low rate. invest in something with a decent return and use the return (profit) to pay off the loan. it would be like getting free money to pay off your bills. 2)if you have an extremely low rate, keep paying on it to build your credit. if your intention to buy a house and incrue more debt, pay off your loan to lower your debt/credit ratio. |
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