04-18-2014 07:23 AM
04-18-2014 07:44 PM
My thought is to keep the car loan all the way through applying for a mortgage. At that point, you might suggest to the mortgage broker that you pay off the car loan in order to improve your disposable income. A car loan adds balance to your credit report in terms of the types of credit you are utilizing responsible. If you are paying responsibly, then I'd want that reporting as long as possible. Depending on the balance, another route would be to pay down some so your payments are smaller, but I definitely wouldn't pay it off altogether if your goal is a better score. My advice would be different if your primary goal is to save on interest costs. In any case, keep up the great work!
04-18-2014 08:22 PM
Thank you for the response. That does make sense as I have never taken out any kind of loan before. 5 years is a long time, but I might pay 100 extra to shorten it by a year. I could definitely use some depth on my credit report. I don't think the interest will be much, it's just the fact that I have to pay so long on the car loan that bothers me.
Owing money on anything drives me nuts, but that's just a pet peeve of mine. But if it helps my score then yes I will not pay it off quickly. My ultimate goal is to get about 30k saved for a house. I will have about 19k saved by years end.
04-18-2014 08:26 PM
Less than 10 months on installment loans don't factor in DTI. I would pay it off if you have the money to do so because at that point you wouldn't be paying interest.
04-18-2014 08:52 PM
Don't pay interest if you don't have to.