@Anonymous wrote:
@Anonymous wrote:
It sounds like with your bonus coming up soon that you're going to have the majority of the debt taken care of, which will dramatically drop your revolving debt and bump up your Fico scores. At that time with the greater scores you could no doubt secure a loan at a much better rate to take care of the remainder of the debt. This way it would be a much smaller loan, a little easier on the eyes. Just a thought.
That's my new plan. Thanks a million.
Just to put both options into light, here:
1.) Your plan is not a bad plan. Indeed smaller loans, for shorter terms, do generally come with better interest rates, everything else being constant.
2.) Given the fact that things got bumpy this year due to a cash flow problem, I would be risk-averse to ever letting my free cash drop below a set amount.
You are betting on being able to take a loan in the future if you need it, but consider: will that money be available when you need it? (are you SURE you WILL be approved, and in time, for an event that would cause you to tap a personal loan in the future?)
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I would shop rates now, for the full amount outstanding, just to entertain how much they will drop when comparing loans for a full payoff vs a reduced amount. Upstart and LendingClub let you play with sliders to see what your payment and rate will be for different amounts. I think Upstart offers both 3 and 5 year terms, too.
