Which SSL to pick for Amex BCE , Ink Business Unlimited, and CFE

[datcombodoe]

So I just removed all of my baddies on Experian and my score jumped 103 points.

i think the next best step is getting a couple personal credit cards especially Chase first for 5/24, (I'm at 1/24) but before that I need a non-mortgage installment account to get the best possible interest rates & SL's. 

@FicoMike0 told me to get the 142 month PenFed SSL for $3150. Should I try to get this, or should I go for a $20,000 180 month at NFCU? I would have to tie up around $1800 vs only $300, but not only would I get a higher point increase from the limit and term, but also the NFCU internal score. 

I also recently applied for a BBP card without waiting for any boost in score, and it says application pending, I called and will have to wait 3-5 days which I think is a good sign.

so all in all, is it worth tying up over 1500$ for over 10 years for a 10-30 points boost as opposed to the penfed SSL? Or is it better off saved / in the market while I keep $300 with PenFed because the risk outweighs the reward?

[JoeRockhead]

1. What are your Fico scores now? 
2. Do you have any open loans now?
3. Do you have any closed loans on your reports?

[Patient957]

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@datcombodoe wrote:

So I just removed all of my baddies on Experian and my score jumped 103 points.

i think the next best step is getting a couple personal credit cards especially Chase first for 5/24, (I'm at 1/24) but before that I need a non-mortgage installment account to get the best possible interest rates & SL's. 

@FicoMike0 told me to get the 142 month PenFed SSL for $3150. Should I try to get this, or should I go for a $20,000 180 month at NFCU? I would have to tie up around $1800 vs only $300, but not only would I get a higher point increase from the limit and term, but also the NFCU internal score. 

I also recently applied for a BBP card without waiting for any boost in score, and it says application pending, I called and will have to wait 3-5 days which I think is a good sign.

so all in all, is it worth tying up over 1500$ for over 10 years for a 10-30 points boost as opposed to the penfed SSL? Or is it better off saved / in the market while I keep $300 with PenFed because the risk outweighs the reward?

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There are several misconceptions here about how SSLs work:

1) They don't tie up any funds long term.  Penfed requires the money be in your account for 30 days before they can set up the loan.  After that, you get it all back.  Not sure if Navy requires the same 30 days, but they won't tie up any funds long term either.

2) If this is your only open installment loan, you will get the max ~30 points with the $3150 loan.  You won't get extra points for a bigger loan.  If it's not your only open installment loan, things get more complicated, and potentially a larger loan could be better.  But this is not what is typically done.

3) I think the Navy Pledge loan has a maximum term of 60 months.  Someone can correct me if that's wrong.  So I'm not sure how you would do a 180 month pledge loan.

One other point to be aware of, an SSL monthly payment will factor into your debt to income ratio.  The normal SSL is only $25 per month, so it doesn't affect your debt to income very much.  If you take a much larger SSL with a much bigger monthly payment, you may affect you DTI more than you want.  Depends on your income.  But this is one reason people usually opt for a $25 per month SSL.

Do you have any other open installment loans or mortgage?  If so what are the amount and term?  If not, are planning to take any in the near future?  If so, an SSL may not be right for you.  If you post some specifics about your profile, we can give you better advice.  If you've already posted this info, please link the other thread.

ETA: Congrats on the baddie removal and 103 points!

[datcombodoe]

Ok so I just did the research on NFCU's website and I would have to do a $30,000+ term for 180 months. But it is 3% instead of 2%.

61 to 180 mos Share Rate + 3% - Up to 60 mos Share Rate + 2%

In general, the following minimum loan amounts are required for extended term loans: $25,000 for loan terms of 61 to 84 months; $30,000 for loan terms of 85 to 180 months".

2. As for datapoints it will be my first open installment loan. I tried $3,001 with NFCU but paid too much and it got closed out.

3. what you were saying about the misconception of SSL's. Yes I would need to wait 30 days with penfed, but I think you may be slightly wrong. That is, yes you can get what you pay back immediately, but if you only paid off 91.1%, you will still have the remaining balances tied up/locked in a savings account.

thank you btw about the baddies

[Patient957]

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@datcombodoe wrote:

Ok so I just did the research on NFCU's website and I would have to do a $30,000+ term for 180 months. But it is 3% instead of 2%.

61 to 180 mos Share Rate + 3% - Up to 60 mos Share Rate + 2%

In general, the following minimum loan amounts are required for extended term loans: $25,000 for loan terms of 61 to 84 months; $30,000 for loan terms of 85 to 180 months".

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I see.  Got it.  Good info.

2. As for datapoints it will be my first open installment loan.

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Okay, good.  Then you would get max benefit (~30 points) with a $3150 loan at PenFed or an equivalent one at Navy.  No need for a large loan.

3. what you were saying about the misconception of SSL's. Yes I would need to wait 30 days with penfed, but I think you may be slightly wrong. That is, yes you can get what you pay back immediately, but if you only paid off 91.1%, you will still have the remaining balances tied up/locked in a savings account.

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Think of it this way.  You send $3150 into your account, wait 30 days, then start an SSL for $3150.  On day 1 of the loan, you get the entire proceeds of the loan, which is $3150 in cash.  You then pay $2900 on the loan, so you have $250 cash left.  But paying $2900 also frees up $2900, so you're back to $3150 in cash with $250 balance on the loan.

Make sense?  Trust me, after 30 days you have all your money back.  Nothing is tied up.

But still, I don't see any benefit to taking a big SSL.  It's just less convenient for no benefit.

[GZG]

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@Patient957 wrote:

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@datcombodoe wrote:

But still, I don't see any benefit to taking a big SSL.  It's just less convenient for no benefit.

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the benefit is 'big loan go brrrrrr in underwriting' the belief is that having a big loan on your report will improve lending outcomes in the future. I highly doubt it helps much, IMO. 

I don't think it's worth it. On top of the fact that you're eating the DTI for the full loan payment despite how much you've paid it off too. Just get a minimum SSL with the longest term from Navy or Penfed.

[FicoMike0]

I don't know about the 180 at nfcu, didn't see it on their webpage.

Ditto @Patient957  and @GZG 

I may have confused the issue about money tied up. I left an amount equal to the loan balance, $188 in my case, in a pen premium online savings account, which pays 2.80%. I didn't have to, the money is not tied up. 

I'll explain a little. I'm 70+.  84 months puts me over 80, I'd like to outlive the loan. I try to leave my affairs in order. I wanted to make sure I always have enough at penfed to pay the loan balance, with instructions for my heir to that effect.  I pay $2 on the loan twice a year from that account to generate activity and pay accrued interest. That's the cost of the loan, $4 a year. Also, I chose to prepay just under 9% because I have read that penfed sometimes forgives loan balances when they drop under $50. Nice of them, but I don't have a payment due until 2030 and I don't want the loan forgiven before then.

My process was

Deposit $2100, wait 30 days,

I'm out $2100,

Borrow the $2100 back,

I'm even,

Prepay $1912,

I'm out $1912, which is now freed up in my regular savings,

Withdraw the $1912,

I'm even again.

If anyone has questions, just ask.

[datcombodoe]

1. EX 754 TU 666 EQ 773

2. no open loans

3. 1 closed loan