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Do I pay early, refinance, or let it go until it’s finished.

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ksuudilla
Member

Do I pay early, refinance, or let it go until it’s finished.

I was unable to find a section for Installment Loans, so please forgive me for posting under Auto Loans (though, this forum is far from reddits … not trying to get on anyones bad side.)

 

I opened my first loan since August'2017 (Baddie) ... in October this past year. I've been working on re-building my credit because I'm trying to buy a house (thats the plan anyway.)


I've not missed a payment and I will be finished in July, but I know that Loans show up differently … and so my question is, do I refinance, pay it early (interest is ungodly), or pay it as I have until it's finished.

I'm worried about my credit kamikaze'ing, because it recently shot up much further than I was anticipating or hoping for in just 7 months.
And so I'm just looking for advice on what my next move should be.

 

DPs

I do have two credit cards. CapitalOneMCPlatinum and CreditOnePlatinum. I've been thinking about opening a third, but am not quite sure which product to chose, all I know is I want to go with Citi or Chase.

Fico - 676 (from 600)
Transunion - 687 (from 594)
Equifax - 604 (hasnt changed as recent yet as the others)

Loan Opened - 10/22/21
Monthly Installments - 95.91x2 (191.82)
Original Loan Amount - 1000.00
Total Paid to Finish - 1726.38

Message 1 of 3
2 REPLIES 2
chiefone4u
Established Contributor

Re: Do I pay early, refinance, or let it go until it’s finished.


@ksuudilla wrote:

I was unable to find a section for Installment Loans, so please forgive me for posting under Auto Loans (though, this forum is far from reddits … not trying to get on anyones bad side.)

 

I opened my first loan since August'2017 (Baddie) ... in October this past year. I've been working on re-building my credit because I'm trying to buy a house (thats the plan anyway.)


I've not missed a payment and I will be finished in July, but I know that Loans show up differently … and so my question is, do I refinance, pay it early (interest is ungodly), or pay it as I have until it's finished.

I'm worried about my credit kamikaze'ing, because it recently shot up much further than I was anticipating or hoping for in just 7 months.
And so I'm just looking for advice on what my next move should be.

 

DPs

I do have two credit cards. CapitalOneMCPlatinum and CreditOnePlatinum. I've been thinking about opening a third, but am not quite sure which product to chose, all I know is I want to go with Citi or Chase.

Fico - 676 (from 600)
Transunion - 687 (from 594)
Equifax - 604 (hasnt changed as recent yet as the others)

Loan Opened - 10/22/21
Monthly Installments - 95.91x2 (191.82)
Original Loan Amount - 1000.00
Total Paid to Finish - 1726.38


How soon do you plan on buying the house? If you are less than twelve months from planned purchase, do NOT refinance the loan.

 

Based on the information you've provided, paying it off quickly would be a good option as it should save on interest (unless you got your loan from one of the predatory lenders who get their interest even if paid early).

 

If this is the only open loan reporting, you will lose some points when it is paid off.

 

If you refinance, you'll be penalized for new account and percentage of balance compared to original amount owed.

 

If you can afford to pay your current loan off faster, that might be your best option. If you are unable to pay it off quickly, you might be better off financially to refinance the loan.

 

Be sure you understand your current loan and the actual cost of paying it off early... be sure you understand the actual cost of the loan you take out to refinance the loan.

 

A local credit union is likely going to be able to refinance the loan for less overall cost.

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Message 2 of 3
SouthJamaica
Mega Contributor

Re: Do I pay early, refinance, or let it go until it’s finished.


@ksuudilla wrote:

I was unable to find a section for Installment Loans, so please forgive me for posting under Auto Loans (though, this forum is far from reddits … not trying to get on anyones bad side.)

 

I opened my first loan since August'2017 (Baddie) ... in October this past year. I've been working on re-building my credit because I'm trying to buy a house (thats the plan anyway.)


I've not missed a payment and I will be finished in July, but I know that Loans show up differently … and so my question is, do I refinance, pay it early (interest is ungodly), or pay it as I have until it's finished.

I'm worried about my credit kamikaze'ing, because it recently shot up much further than I was anticipating or hoping for in just 7 months.
And so I'm just looking for advice on what my next move should be.

 

DPs

I do have two credit cards. CapitalOneMCPlatinum and CreditOnePlatinum. I've been thinking about opening a third, but am not quite sure which product to chose, all I know is I want to go with Citi or Chase.

Fico - 676 (from 600)
Transunion - 687 (from 594)
Equifax - 604 (hasnt changed as recent yet as the others)

Loan Opened - 10/22/21
Monthly Installments - 95.91x2 (191.82)
Original Loan Amount - 1000.00
Total Paid to Finish - 1726.38


1. In the run up to a mortgage application you should not make any credit applications of any kind.  So no refinance and no new credit card.

2. You should just pay off the loan. That will mean one less account with a balance, which is good for mortgage scores. It's also good for your debt to income ratio, which is important to mortgage applications.

3.  You should let one of your credit cards report a small balance each month before you pay it off, while the other card reports a zero balance.

4.  You should pull a MyFICO 3-bureau report at some point, to find out what your mortgage scores are.


Total revolving limits 721200 (619200 reporting) FICO 8: EQ 725 TU 723 EX 700

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