Penfed SSL

[LuckyB338]

I am considering taking out a Penfed SSL within the month. I've read through a lot of the forum posts about SSLs but still have a few questions.

I spoke with a Penfed CSR and was advised that prepayment does have an effect on maturity date and that I will have to make a payment of at least $25 each month despite payment in advance.

If I were to choose a 60 month term for $3010 and then immediately pay down to 8.9% (approx. $2735), I can make 11 more payments of $25 before I pay off the entire amount.

Can someone with recent experience confirm that prepayment will lessen the loan term or if it will remain the same with due date being pushed up?

I am not necessarily doing this for the score bump as I currently have 2 installment loans (student loan and auto lease) reporting. I want to establish a positive relationship with Penfed and maybe in the process improve my EQ FICO 9 (50 pts less than FICO 8) and/or Penfed internal score so I can qualify for better credit products.

[AverageJoesCredit]

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@LuckyB338 wrote:

I am considering taking out a Penfed SSL within the month. I've read through a lot of the forum posts about SSLs but still have a few questions.

I spoke with a Penfed CSR and was advised that prepayment does have an effect on maturity date and that I will have to make a payment of at least $25 each month despite payment in advance.

If I were to choose a 60 month term for $3010 and then immediately pay down to 8.9% (approx. $2735), I can make 11 more payments of $25 before I pay off the entire amount.

Can someone with recent experience confirm that prepayment will lessen the loan term or if it will remain the same with due date being pushed up?

I am not necessarily doing this for the score bump as I currently have 2 installment loans (student loan and auto lease) reporting. I want to establish a positive relationship with Penfed and maybe in the process improve my EQ FICO 9 (50 pts less than FICO 8) and/or Penfed internal score so I can qualify for better credit products.

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Curious what is your credit score and profile look like? With no need for a ssl, imo it's better to just get a credit card from them and establish good payment history over next year. You don't need a loan necessarily to establish history/ positive relationship. Just a thought. 

[LuckyB338]

It's really due to the bankruptcy, I don't honestly believe I would be approved though I've seen recent approvals from people with similar profiles.

I have been with them for about a year and their FICO 9 report has not changed. My scores have been up and down in the 600-625 range with minor changes month to month. There is significant difference between my FICO 8 and FICO 9 scores. I've tried to use personal loan rate prequal tool and it comes up "unable to approve". If I were to apply, they would use the same score to evaluate my application and it would likely be denied.

Please take a look at the profile and advise as to how I should proceed.

Profile:

FICO 8: EX 676, TU 681, EQ 685

BK7 discharged March 2021

3 late payments

EX 3, EQ 2, TU 3 inquiries (all set to fall off AUG 2022)

2 AUs (Penfed and US Bank) and 2 CCs: Cap1 QS $5.5k and Venture1 3.3k (upgraded from platinum)

1 Auto Lease & 1 Student Loan
Total Credit: 27k

Usage: 2%

Average Age: 2yrs 8 months

Oldest acct: 5yrs 5 months

Income: $129k

[zerofire]

I believe that your profile is too saturated for new loans right now. With the BK and 3 lates after that it is rather off putting to begin with but not insurmountable. The problem is that you have 2-3 inquiries already and that is what most lenders will tolerate with only clean profiles. You definitely do not need this loan as a credit building aspect as you have both auto and student loans. Those loans are basically the same category for credit purposes. At your current exposure level you have the max that your profile can support with the current state of the economy. I recommend waiting until August, having the HP's fall off, and then apply for a single product that you really desperately want. After that you go back to gardening. Most lenders right now are asking for 720 or so just for new customers to get a taste.

[LuckyB338]

I agree that my profile does not need an additional item reporting. However, my apologies for the lack of clarity. The lates were prior to the bankruptcy.

My purpose in setting up an SSL is to establish a positive history with penfed and penfed alone so that can be leveraged for another credit product with penfed in about 6-12 months.

[zerofire]

PenFed does not care. Their thing is the share amount being present and time as member. You need to make product work for you not you work for product. PenFed just uses the standard FiCO score plus what is on your report to figure out that you are a good customer. In your case there just is no room for any PenFed loan accounts at this time, I think. As I suggested the best way is to wait for August and then go direct for whatever card you want that you can fit. That can be a PenFed CC. I would think anything but a Pathfinder would make it then but depending on score after the HP's drop you might even pull a Pathfinder.

[LuckyB338]

That makes sense. What do you mean share amount though? The actual dollar amount in the savings account?

If so, that had been $250 since the accounts were opened in April of 2021. The checking account has maintained a balance of $25k month to month since October of 2021. After speaking with the CSR about the SSL not more than a week ago, I moved $10k from my checking on to the savings bc it needed to be in the savings for at least 30 days.

In any case, thank you so much for your insight. I had initially planned to apply after August but the internal Fico 9 score made me reconsider that decision.

[zerofire]

By share amount I mean the $25 or so that is required to purchase a share. The actual extra that you have is not the banks concern as they just automatically lump it together from everyone to make available for loans. Usually FiCO 9 scores are elevated from the previous version. The 720 recommended is a FiCO 8. When the whole world is unstable you do not want to be Peter when the lendee pays Paul.

[LuckyB338]

Does that mean each $25 is a share or that $25 out of however much I have in my account is only considered the share amount?

Please accept my apologies for the questions. I want to have a good understanding.

[SouthJamaica]

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@LuckyB338 wrote:

I am considering taking out a Penfed SSL within the month. I've read through a lot of the forum posts about SSLs but still have a few questions.

I spoke with a Penfed CSR and was advised that prepayment does have an effect on maturity date and that I will have to make a payment of at least $25 each month despite payment in advance.

If I were to choose a 60 month term for $3010 and then immediately pay down to 8.9% (approx. $2735), I can make 11 more payments of $25 before I pay off the entire amount.

Can someone with recent experience confirm that prepayment will lessen the loan term or if it will remain the same with due date being pushed up?

I am not necessarily doing this for the score bump as I currently have 2 installment loans (student loan and auto lease) reporting. I want to establish a positive relationship with Penfed and maybe in the process improve my EQ FICO 9 (50 pts less than FICO 8) and/or Penfed internal score so I can qualify for better credit products.

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1. Don't do it if you don't need the score bump. Not worth opening a new account over.

2. Your having an SSL with them won't mean a thing in terms of your future applications for credit products.

3. CSR's can't be relied upon to give accurate advice over these things.