Loan question

[pkenn]

I have two smaller personal loans and have the opportunity to get a lower rate through amex and pay the two off and only have the new one.  Will doing that do anything to my score?

thanks all

[Horseshoez]

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@pkenn wrote:

I have two smaller personal loans and have the opportunity to get a lower rate through amex and pay the two off and only have the new one.  Will doing that do anything to my score?

thanks all

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It will be a mixed bag, there are lots of variables which can both help and hurt your scores; to give you any kind of reasonably accurate SWAG, we'll need to know more details like, how old the smaller loans are, what was their original limit, what is the current balance (and limit if it has changed), and of course, what will be the initial utilization for the new loan if/when you make this move.

The other way to look at your situation is from the perspective of "Finances over FICO"; viewing your options under this filter, who cares what happens to your scores?  This move will help you financially in the short term, and most likely both financially and from a score perspective in the long term.

[pkenn]

Thanks for the reply

the loans are both a couple of years old and at $15k balance ( 1/2 of the original amount and 1/2 way through the terms.)

the new loan will be $20k.

i agree though its $300 savings a month so duh!

thanks again

[SouthJamaica]

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@pkenn wrote:

Thanks for the reply

the loans are both a couple of years old and at $15k balance ( 1/2 of the original amount and 1/2 way through the terms.)

the new loan will be $20k.

i agree though its $300 savings a month so duh!

thanks again

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It won't have much of an effect on your scores either way, once everything's reported. So if you can save $300 month, why not?

[ptatohed]

What are the rates and terms of the loans?  Any fees?

[Kforce]

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@pkenn wrote:

The loans are both a couple of years old and at $15k balance

( 1/2 of the original amount and 1/2 way through the terms.)

The new loan will be $20k.

I agree though its $300 savings a month so duh!

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To save $300 a month in interest, would require an extreme spread of interest.

Something like current @ 33% and new @ 5%.

Especially if the new loan is larger than what you owe.

Are you talking about $300 less in payments?

Can be a big difference from interest savings.

You might have a lower payment, longer term,

and be paying more in interest than current loans.

If you want real numbers please provide.

Each loan's current balance, rate, and monthly payment.

New loan  amount, rate and payment or term period.

In addition it would also be nice if you could provide how much

monthly you could spend against all loan payments.

Real gain/loss between each can then be calculated.