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How should I finish this auto loan?

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Regular Contributor

How should I finish this auto loan?

In late 2013, I financed a 2012 Charger for $21K at 15.67% APR for 72 months, (this was my first credit anything and the only bank that would finance me wasn't so lenient).

Since, this past September, I refinanced my car at another bank for 3.49% for 60 months which lowered my payment and all.

Anyway, with this new job I have and the doubled income, I plan to put a lot of my extra money to my auto loan. Would it be better to pay off the entire car (I expect to be able to pay the whole thing off in 1.5 years). So, I know I'll end up saving on interest.

BUT, with my limit credit history, would it look better if I paid all of it off except around $5K and just kept making payments on the $5K so that it shows more payment history? Or will it look better if I go ahead and pay the whole thing off?
EQ: 710(FICO) EX: 695(FICO) TU: 708(FICO)
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2 REPLIES 2
Senior Contributor

Re: How should I finish this auto loan?

Ha... you sound like me.  I bought a used 2012 Charger fresh out of BK13... got a bad interest rate then refinanced 9 months later for a better rate.

 

I kept it not quite 2 years before trading it last month.

 

Anyway, installment loans don't have nearly the effect on your credit scores than revolving CC's do... I wouldn't rush to pay it off just to improve my credit.  Your score might actually drop if you paid it off... depending on what the rest of your profile looks like.  I'd pay enough each month to catch up and get some positive equity...

 

 

 

 

Gardening since: 3-25-15
Message 2 of 3
Regular Contributor

Re: How should I finish this auto loan?

Hehe, well have 5 credit cards and I'm not looking for ANY more.

I only want it at least paid down because I don't like FICO saying I have a high outstanding balance on it. Haha. All my cc's are paid off or way down so I know I don't have high balances on them.

That, and I just don't like the feeling of owing so much money. I was thinking about paying the majority of this off, and then going to get new BMW M4 Or Audi S5...I haven't decided. But then again, my Charger is fine so I don't need a new car anytime soon really.
EQ: 710(FICO) EX: 695(FICO) TU: 708(FICO)
Message 3 of 3
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