topic Re: Paying off early in General Credit Topics

Paying off early

Anonymous — Sat, 25 Feb 2012 23:08:43 GMT

I have a quick question... how does paying off an auto loan reflect of your reports? As a closed account PIF? I'm considering paying mine off next week. Just to avoid the 30$ a month in interest.. also because I don't use it.

Re: Paying off early

Revelate — Sat, 25 Feb 2012 23:57:15 GMT

@Anonymous wrote:
I have a quick question... how does paying off an auto loan reflect of your reports? As a closed account PIF? I'm considering paying mine off next week. Just to avoid the 30$ a month in interest.. also because I don't use it.

Limited to no benefit to finishing off an installment loan FICO wise: all anecdotal but seems to be consistent for everyone. Future underwriting it's probably a good thing.

Personally I'd be more than happy to pay $30 a month to continue pushing out a tradeline (my own auto loan currently is more like $15/day), but in your case, why not just see if additional payment pushes out your next payment due date? That way you save money in interest, but can still gain the advantages of a longer positive tradeline.

Re: Paying off early

webhopper — Sun, 26 Feb 2012 01:17:20 GMT

In my opinion, pay it off early is the way to go. If you have money to do so. I wouldn't listen to the other poster, paying it off early is what a financially conservative person would do. Financially conservative folks end up with better scores at the end. Most fico high achievers don't even have an auto loan.

Re: Paying off early

MarineVietVet — Sun, 26 Feb 2012 02:31:35 GMT

@webhopper wrote:
In my opinion, pay it off early is the way to go. If you have money to do so. I wouldn't listen to the other poster, paying it off early is what a financially conservative person would do. Financially conservative folks end up with better scores at the end. Most fico high achievers don't even have an auto loan.

My advice as far as paying down/paying off debt is always the same. As long as you don't deplete your savings you should pay off any debt as fast as possible.

Make being debt free should be your #1 priority with consideration of the impact on a score a distant second.

Re: Paying off early

Anonymous — Sun, 26 Feb 2012 02:42:33 GMT

@MarineVietVet wrote:
@webhopper wrote:
In my opinion, pay it off early is the way to go. If you have money to do so. I wouldn't listen to the other poster, paying it off early is what a financially conservative person would do. Financially conservative folks end up with better scores at the end. Most fico high achievers don't even have an auto loan.

My advice as far as paying down/paying off debt is always the same. As long as you don't deplete your savings you should pay off any debt as fast as possible.

Make being debt free should be your #1 priority with consideration of the impact on a score a distant second.

That's the thing it's the only debt I have. Every month my cards report 0. I have a little over 5k left on the loan and the payment is a little over 240 a month. So, it doesn't hurt paying the payment. But according to my CU, payoff is in 2014 so i'd lose 720 in interest...I guess its small potatoes but I could save 720, by getting off of the 5k now. But like the other poster said its a positive tradeline (my first and only installment).

Re: Paying off early

MarineVietVet — Sun, 26 Feb 2012 04:00:03 GMT

@Anonymous wrote:

That's the thing it's the only debt I have. Every month my cards report 0. I have a little over 5k left on the loan and the payment is a little over 240 a month. So, it doesn't hurt paying the payment. But according to my CU, payoff is in 2014 so i'd lose 720 in interest...I guess its small potatoes but I could save 720, by getting off of the 5k now. But like the other poster said its a positive tradeline (my first and only installment).

Only you can make the final decision of course but for me there is never an option besides paying off debt as quick as I can. That TL will continue to report in good standing for generally 10 years after being paid off and closed.

Re: Paying off early

pipeguy — Sun, 26 Feb 2012 04:11:34 GMT

@Anonymous wrote:
That's the thing it's the only debt I have. Every month my cards report 0. I have a little over 5k left on the loan and the payment is a little over 240 a month. So, it doesn't hurt paying the payment. But according to my CU, payoff is in 2014 so i'd lose 720 in interest...I guess its small potatoes but I could save 720, by getting off of the 5k now. But like the other poster said its a positive tradeline (my first and only installment).

It might be the only "debt" you currently have, but based on your sig its not your only tradeline. I agree with those that advise you to pay it off ASAP if it doesn't hurt you to pay it off as far as cash flow or savings. Even paid-closed it will report as a positive TL.

Re: Paying off early

webhopper — Sun, 26 Feb 2012 04:32:32 GMT

I agree with marinevietvet 100%.

And by the way, I'm marrying a marine operation Iraqi freedom vet in may . Marines are golden

Re: Paying off early

MarineVietVet — Sun, 26 Feb 2012 15:52:27 GMT

@webhopper wrote:

And by the way, I'm marrying a marine operation Iraqi freedom vet in may . Marines are golden

Tell him I said Semper Fi!!!!

Re: Paying off early

LS2982 — Sun, 26 Feb 2012 15:53:45 GMT

@Anonymous wrote:
I have a quick question... how does paying off an auto loan reflect of your reports? As a closed account PIF? I'm considering paying mine off next week. Just to avoid the 30$ a month in interest.. also because I don't use it.

It will report as PIF but shouldn't increase scores very much if any.

Re: Paying off early

LS2982 — Sun, 26 Feb 2012 15:56:26 GMT

@MarineVietVet wrote:
@webhopper wrote:
In my opinion, pay it off early is the way to go. If you have money to do so. I wouldn't listen to the other poster, paying it off early is what a financially conservative person would do. Financially conservative folks end up with better scores at the end. Most fico high achievers don't even have an auto loan.

My advice as far as paying down/paying off debt is always the same. As long as you don't deplete your savings you should pay off any debt as fast as possible.

Make being debt free should be your #1 priority with consideration of the impact on a score a distant second.

Edit: double post due to system saying post flooding but posting anyway.

Re: Paying off early

LS2982 — Sun, 26 Feb 2012 15:55:25 GMT

@MarineVietVet wrote:
@webhopper wrote:
In my opinion, pay it off early is the way to go. If you have money to do so. I wouldn't listen to the other poster, paying it off early is what a financially conservative person would do. Financially conservative folks end up with better scores at the end. Most fico high achievers don't even have an auto loan.

My advice as far as paying down/paying off debt is always the same. As long as you don't deplete your savings you should pay off any debt as fast as possible.

Make being debt free should be your #1 priority with consideration of the impact on a score a distant second.

I agree with MVV.

Not to mistake my earlier post OP if you have the opportunity to PIF do it, just don't go into it with your heart set on a big increase!

Re: Paying off early

webhopper — Sun, 26 Feb 2012 16:05:24 GMT

@MarineVietVet wrote:
@webhopper wrote:

And by the way, I'm marrying a marine operation Iraqi freedom vet in may . Marines are golden

Tell him I said Semper Fi!!!!

I will do it... he always says "Pain is just weakness leaving the body" every time I complain about something. LOL I've got RA so sometimes I just randomly hurt in places that I shouldnt. I swear if I ever get totally crippled, I bet he would just throw me over his shoulder and keep on going forward like it was no big deal... hopefully that never happens but its nice to know that he will always be there. Also, he could care less that I make twice as much money... he'd be happy sleeping under a bridge which is nice cause I don't have to worry about him being materialistic. I think thats what separates Marines from the rest of society they never take things for granted, and they aren't willing to give up or flake out when things get tough.

Re: Paying off early

Anonymous — Sun, 26 Feb 2012 20:46:28 GMT

@pipeguy wrote:
@Anonymous wrote:
That's the thing it's the only debt I have. Every month my cards report 0. I have a little over 5k left on the loan and the payment is a little over 240 a month. So, it doesn't hurt paying the payment. But according to my CU, payoff is in 2014 so i'd lose 720 in interest...I guess its small potatoes but I could save 720, by getting off of the 5k now. But like the other poster said its a positive tradeline (my first and only installment).

It might be the only "debt" you currently have, but based on your sig its not your only tradeline. I agree with those that advise you to pay it off ASAP if it doesn't hurt you to pay it off as far as cash flow or savings. Even paid-closed it will report as a positive TL.

Yeah its one tradeline of 7 or 8? but it's the only "debt" that reports. Everything else I let close with a zero balance or a few dollars on my amex.

Re: Paying off early

Anonymous — Sun, 26 Feb 2012 20:47:49 GMT

@LS2982 wrote:
@Anonymous wrote:
I have a quick question... how does paying off an auto loan reflect of your reports? As a closed account PIF? I'm considering paying mine off next week. Just to avoid the 30$ a month in interest.. also because I don't use it.
It will report as PIF but shouldn't increase scores very much if any.

Thanks! This is really what I was trying to figure out. PIF/Closed. Interesting...well only have a few days to figure out if i'm paying it off or paying it for the month... will update.

Re: Paying off early

Lasardo — Fri, 04 May 2012 07:24:37 GMT

Amex, I am glad you posted this question. I am curious what you may or may not have decided. I also have about 5k to pay off on my auto loan. It is my oldest tradeline (sad but true) . I am paying close to $40 a month in interest but am also determined to increase my score. I have the option to pay it off early. Will you keep us posted on what happens and how your score changes if you should decide to pay it off?

Re: Paying off early

aussiesareforever — Sat, 05 May 2012 01:48:02 GMT

I also have a $4800 auto loan that I am working hard to pay off as soon as possible. I'm already ahead of my payments by 3 months but I hope to get at least half of it paid off this month. Paying off early is definitely the way to go.

I paid off a furniture loan (also an installment loan) this January. I paid it off 18 months early. It is reporting as closed and paid in full. My FICO score didn't drop after I paid it off. I expect it will continue to report for another nine and a half years.