Paying down early?

Anonymous — Sun, 24 Feb 2008 13:57:28 GMT

This has probably been covered before, but I'm new here so I'm just curious about what kind of effect this has on my credit score. Two weeks ago, I bought a new car. I got a 5.9% loan on it from a local community credit union and it included a .15% discount for being a member with them for at least six months. I'm not really interested in carrying the loan for the next 5 years. If I pay it off on schedule, it wouldn't be paid off until March 1, 2013...which is way too long for an $8000 loan (I made a $8,000 down payment and got $1000 for a trade-in and $750 rebate). And the payments themselves are insanely low at $162.80...which is $13 lower than my old car payments from 7 years ago, when I had worse credit and made less money. So my question is: Is paying off the car in a year or so a bad idea? I told the financing guy that I was willing to make $400 car payments, but he said that the only way he could get me that 5.9% rate was with a five year schedule and if I wanted I could just pay it off early on my own. Everyone is telling me to not be in a big hurry to pay it off, but to be honest, I hate making car payments. I don't have any other debt at all. No mortgage, only one credit card, which I only use when I go on vacation (hotels, airline tickets and car rentals) and no student loans. Will paying off a loan 4 years early be bad on my Credit Report?

Re: Paying down early?

sunrise — Sun, 24 Feb 2008 17:31:35 GMT

Welcome!!

Paying off your car note early isn't a bad thing. You may take a small hit to your scores but it will be temporary.

I just wouldn't pay it off in less than 6 mo's. But, you mentioned 4 years instead of 5....so, you are good to go!!

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Paying down early?

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