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Credit builder loan that can be paid off 95% immediately

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folks19
Frequent Contributor

Credit builder loan that can be paid off 95% immediately

I currently have a self credit builder loan, which I opened to add installment credit to my report.

The thing is that self doesn't let you pay early. (If you pay early, it just shortens the term of the loan, and you still must make the minimum payment next month.) This is a problem because the high unpaid balance lowers my score. And also, the time when a loan helps the most is when it's almost paid off but not fully paid. With self, that period of time will only last about a month or two.

So I'm now looking for a new credit building loan that I can open today, pay it down TODAY to a very small amount, and pay the remainder when the loan term is about to finish.

(For example:

I take out a loan of 1200 today, with a 50 monthly payment for 24 months. I then pay 2350 immediately, and 23 months later, I pay the remaining 50.

By doing that, I enjoy 2 years of having an open loan on my report but with less than 5% utilization.)

Does anybody have any suggestions?

 

As a side note, I don't understand why self won't give this option, as their purpose is to help build credit, but without the option of prepayment, you get stuck with a high balance for a long time.

 

I also want to mention that I do NOT plan to close my self loan, but rather, I'll leave it open for now. At least as of now. Thank god I only chose the 12 month option.

59 REPLIES 59
Anonymous
Not applicable

Re: Credit builder loan that can be paid off 95% immediately

NFCU SSL

 

Alliant Personal Loan

 

 

Message 2 of 60
AllZero
Mega Contributor

Re: Credit builder loan that can be paid off 95% immediately

Suggestion? Stick with what you have until your term ends.

 

I would only recommend a 5+ year SSL if available to you.

 

I would recommend reading the below from CreditGuyInDixie
Adding an installment loan -- the Share Secure technique
The Quest for an SSL alternative to Alliant
NFCU SSL

Here are two institutions that have SSL which you can pay in advance to 8.9% utilization without shortening loan term:
NFCU - membership restrictions.
SSFCU - geofence.

Message 3 of 60
folks19
Frequent Contributor

Re: Credit builder loan that can be paid off 95% immediately

Thank you for the suggestions. Although, I don't think I'm eligible to join NFCU, but I'll check out the other ones.

Message 4 of 60
Anonymous
Not applicable

Re: Credit builder loan that can be paid off 95% immediately

US Bank personal loans work too I think
Message 5 of 60
SouthJamaica
Mega Contributor

Re: Credit builder loan that can be paid off 95% immediately

Lightstream personal loans also work. When you make a prepayment they give you the option of lowering your monthly payment, which would keep the term of the loan intact.

 

 

 

Update 3/28/21  After the Lightstream loan got down to a $1000 balance, it stopped giving me that option.


Total revolving limits 741200 (620700 reporting) FICO 8: EQ 701 TU 704 EX 685

Message 6 of 60
CH-7-Mission-Accomplished
Valued Contributor

Re: Credit builder loan that can be paid off 95% immediately


@Anonymous wrote:

NFCU SSL

 

Alliant Personal Loan

 

 


This also works with Alliant auto loans.   I took out a car loan in January 2019 but have paid it down to 5K.   My next payment due is years from now.   Also, my SO had a loan from Nissan on a used Nissan Leaf, and they do the same thing.   Pay ahead and they push out the next due date for as long as you have pre-paid.

Message 7 of 60
CH-7-Mission-Accomplished
Valued Contributor

Re: Credit builder loan that can be paid off 95% immediately


@AllZero wrote:

Suggestion? Stick with what you have until your term ends.

 

I would only recommend a 5+ year SSL if available to you.

 

I would recommend reading the below from CreditGuyInDixie
Adding an installment loan -- the Share Secure technique
The Quest for an SSL alternative to Alliant
NFCU SSL

Here are two institutions that have SSL which you can pay in advance to 8.9% utilization without shortening loan term:
NFCU - membership restrictions.
SSFCU - geofence.

is SSFCU Security Service Federal CU?    There are many CU's that have the same acronyms, so that's why I ask.  Thanks!


 

Message 8 of 60
AllZero
Mega Contributor

Re: Credit builder loan that can be paid off 95% immediately


@CH-7-Mission-Accomplished wrote:

@AllZero wrote:

Suggestion? Stick with what you have until your term ends.

 

I would only recommend a 5+ year SSL if available to you.

 

I would recommend reading the below from CreditGuyInDixie
Adding an installment loan -- the Share Secure technique
The Quest for an SSL alternative to Alliant
NFCU SSL

Here are two institutions that have SSL which you can pay in advance to 8.9% utilization without shortening loan term:
NFCU - membership restrictions.
SSFCU - geofence.

is SSFCU Security Service Federal CU?    There are many CU's that have the same acronyms, so that's why I ask.  Thanks!



You are correct, it is.

Message 9 of 60
Anonymous
Not applicable

Re: Credit builder loan that can be paid off 95% immediately


@Anonymous wrote:
US Bank personal loans work too I think

I think USBank does but the total cost of the loan is higher with them than w a CU if I read it correctly at their website. I think there's a monthly fee or something. Just double check the total cost of the bank loan versus at a CU. 

Even if you're not a member of NFCU or Alliant and can't find a way to join, know many CU's offer an SSL and you likely can join at least a good local CU. 🙏🏻

Message 10 of 60
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