topic Re: Amortize Personal Loan down to $150 or $50? in Personal Finance

Amortize Personal Loan down to $150 or $50?

AzCreditGuy — Sat, 28 Nov 2020 04:16:07 GMT

I recently applied $950 to my Sofi personal loan bringing down the balance to $1130.46. I expect a 20+ boost in credit score from the big 3 since now the UTI will be below 9%. As everybody know if you pay off a loan your score drops and you punished for not having debt, well in order for me to avoid that issue and get the best possible score for a mortgage, I will be obtaining within 6 to 9 months. I am thinking of doing a 0% APR BT of $850 or $950 and asking SOFI to Re-Amortize the loan at the smaller balance amount. I still have 2 years and 9 months to pay off the loan, but Id like to take the interest payments down to $1 lol and keep the loan my credit profile for higher scores.

Re: Amortize Personal Loan down to $150 or $50?

Anonymous — Sat, 28 Nov 2020 04:30:53 GMT

If you're going for a mortgage in 6-9 months, you only need to keep it alive until after you close. Once you get another loan*, it most likely won't help you anymore to have open (*especially a new mortgage).

I looked it up and SoFi *may* offer re-amortization on personal loans, though obviously you'll have to reach out to them to see what can be done.

Re-amortization may help you in reducting DTI, so I'd look into it as long as it's not a refinance/new account. The basic math would say longer repayment period for same balance would equal smaller monthly obligations.

Re: Amortize Personal Loan down to $150 or $50?

AzCreditGuy — Sat, 28 Nov 2020 14:31:21 GMT

@Anonymous Currently paying out $20+ in interest a month, which a BT would fee me at $33 for the transfer and save me money in the long run.I dont mind paying $1 of interest a month. Yes SOFI will Amortize the loan as I did it before when I paid down $7,500. Just want to keep it and than close it when I get my mortgage. Its coded as a CFA, even though it isnt.

Re: Amortize Personal Loan down to $150 or $50?

ccquest — Sat, 28 Nov 2020 17:31:30 GMT

If that BT isn't a new account and doesn't raise your overall required monthly payments across the board, I'd say go for it. I'd think that since the SoFi loan has 3 years left almost and the BT is most likely 12 months, the required payment would go up.

For mortgage, you want the lowest possible existing debt obligations to get the best approval position.

Re: Amortize Personal Loan down to $150 or $50?

AzCreditGuy — Sat, 28 Nov 2020 18:37:32 GMT

Been in the garden since July 2019, the only new loan would be the mortgage. BT is from a credit card that's almost paid off, I guess they want me to do another BT lol. Yes I understand that the lowest possible debt is needed for a mortgage