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Paying off loan early.

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Established Member

Paying off loan early.

Hey guys and gals. i have a question and I hope this is the right area. I was involved in an auto accident last year and my vehicle was totaled out. Well im still making payments on it because its still under contract. (no GAP, I know now to get itSmiley Sad) Im receiving some compensation from it and I want to pay it off and be over with it. good idea or no? if i run the full term of the contract that would be a lot of interest I would end up paying. How hard of a hit will i end up taking on my credit for paying it off early? decisions decisions. thanks in advance.

Message 1 of 8
7 REPLIES 7
Valued Member

Re: Paying off loan early.

I personally would pay it off, no sense in keeping it and paying more money to potentially not impact your score. Your score will come back up if it is impacted, the money wasted won't come back.
Message 2 of 8
Established Member

Re: Paying off loan early.


@Masteringmyscore wrote:
I personally would pay it off, no sense in keeping it and paying more money to potentially not impact your score. Your score will come back up if it is impacted, the money wasted won't come back.

my thoughts exactly. thanks.

Message 3 of 8
Established Contributor

Re: Paying off loan early.

Pay it off

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Message 4 of 8
Frequent Contributor

Re: Paying off loan early.

If you take a shorter loan period, the lack of GAP insurance isn't as big of a deal.  When I buy a car, I tend to look less at the monthly payment and instead look at how much I'd spend in interest over the length of the entire loan.  And then I think of what I could do with that money. Usually keeps me from ever taking a loan longer than 3 or 4 years unless they are offering such a low interest I'd make more money keeping the extra money in the bank. 

 

I'd pay the loan off as fast as you can.  Playing the max the fico score game isn't worth it when you are loosing big money in interest.

Current FICO8: EQ:777, TU:754, EX:761 | 2x 30 day lates 4.5-6yrs ago
AAoA: 10 years; AAoOA: 13 months; Credit Length: 21 years
INQ Eq: 3 / Tu: 5 (4 for auto) / Ex: 9 (5 for auto)
Message 5 of 8
Established Member

Re: Paying off loan early.


@Miner wrote:

If you take a shorter loan period, the lack of GAP insurance isn't as big of a deal.  When I buy a car, I tend to look less at the monthly payment and instead look at how much I'd spend in interest over the length of the entire loan.  And then I think of what I could do with that money. Usually keeps me from ever taking a loan longer than 3 or 4 years unless they are offering such a low interest I'd make more money keeping the extra money in the bank. 

 

I'd pay the loan off as fast as you can.  Playing the max the fico score game isn't worth it when you are loosing big money in interest.


that makes sense. Once I receive the funds Im just gonne pay the rest of it off. Its a jacked up loan to begin with. (high interest). So im just gonna get it from over my head and call it a day. Thanks for the response.

Message 6 of 8
Community Leader
Valued Contributor

Re: Paying off loan early.

Pay it off definitely. I would want to be done with it too. I understand your frustration. I bought a car and then six months later the transmission failed. It would have cost more than the value of the car to have it fixed and insurance wouldn’t cover it. I had to scrap the car, yet still pay for it lol. Fun stuff. 

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Message 7 of 8
New Member

Re: Paying off loan early.

I agree with everyone else. Get rid of that loan.

Once its paid off get a new loan for a new car.

 

I recently lost 2 vehicles in the span of less then 10 seconds when my garage built in 1998 fell on them. Sad Sad Sad. One paid off and another only had ONE PAYMENT LEFT. UGH!

Well needless to say I paid that last payment and put the insurance money down for a newer model. It was a nice down. lol

What stinks is, I now have another 3 years of payments when I should be paying off two credit cards with the money I wouldn't be spending on a car.

But isn't that always the way?

You make financial plans and the sky falls.

 

Anyway, pay off that dreaded loan.

Message 8 of 8
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