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Util and car loan

Regular Contributor

Re: Util and car loan

cheddar wrote:

For an installment loan, utilization is calculated as the ratio of the current balance to the original amount of the loan. As you pay the loan down over time, your utilization on that account will continue to improve over the period of the loan.

Wait, so does this mean, if you had an installment loan for a car that started at 20k, had it paid down to 10k, and then refinanced the loan at a better rate with another company, that your Installment util% went from 50% to 100%? Is that going to hurt much?

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Moderator Emeritus

Re: Util and car loan

Yes, that's what it means.  See my comments above about whether it will hurt much and whether it's even worth worrying about.
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