topic Pay off car loan in General Credit Topics

Pay off car loan

Smooth_J — Tue, 22 May 2007 14:14:47 GMT

Should I pay off my car loan with my new credit card? I just refinanced the car loan the beginning of this year. The credit card has 0% for 12 months and I beleive (at least hope) with 0% I can pay it off, but I am unsure if this is a wise decision... Please let me know. Thank you.

Re: Pay off car loan

Tuscani — Tue, 22 May 2007 14:33:07 GMT

That would be a very bad idea in terms of your score. However, if the rate is awful on your auto loan it may be wise. So we need more info. :)

Message Edited by Tuscani on 05-22-2007 09:33 AM

Re: Pay off car loan

Smooth_J — Tue, 22 May 2007 14:44:21 GMT

My current rate for my car loan was 11.9 till I refinanced. Now its 9.19, but I still have a negative item on my credit report that will be on there till 2011 :( I tried to remove it, but they said they can't and it would be against the law if they did... Honestly, I just want to pay off this as quick as possible, however according to my scores and etc they save I do not have enough credit experience. So I am unsure what to do in that case...

Re: Pay off car loan

Boswd — Tue, 22 May 2007 14:46:41 GMT

yeah more info. What is going to be your interest rate after the 12 months is up? In the short term it may be nice to be paying interest free for a year but what happens after the year is up. Compare and contrast each interest rate. How close to maxing out the card would it be if you paid off the car loan?

Re: Pay off car loan

Smooth_J — Tue, 22 May 2007 15:57:29 GMT

After that...it will be a 21% rate which is very high, but I guess it is ok for the short time to pay intrest free on at least part of the debt (have around 9k left on the car loan). What does everyone think?

Re: Pay off car loan

Boswd — Tue, 22 May 2007 16:00:26 GMT

It depends on how quickly you can pay off your credit card otherwise I would say stay with the current refinancing of your current car loan. 21% interest is tough to swallow. Yeah you'll have a year of interest free but you will lose out in the long run by paying almost quadrupel the interest on your Credit card.;

Re: Pay off car loan

Smooth_J — Tue, 22 May 2007 16:37:59 GMT

Do you think it wise to "split it up"...half stays on the loan and half on the CC?

Re: Pay off car loan

Boswd — Tue, 22 May 2007 17:15:21 GMT

Again that all depends on how quickly you can payoff the amount on the credit card, if you can do it within the 12 month of interest free than that's not a bad idea, or at least a very big portion of it. But if not all you are really doing is just transferring the debt, and not getting rid of it. And if it's going to take a few years to pay off the second half of the loan that you transferred to your credit card than again you will lose out on paying more for the high interest. Again it all depends on how quickly you plan on paying off the debt transferred to the credit card.

Re: Pay off car loan

Smooth_J — Tue, 22 May 2007 18:31:07 GMT

I decided i am not going to go with it. Its actually too much of a risk and I think its best to keep that new auto loan a bit longer to build credit. Thank you all!