@Amiashu12 wrote:I really appreciate the help here. What I would like to understand is, let's say I get an ssl through Penfed for $2500 for 60 months. Why do I pay down <9% and make monthly $25 payment VS. just pay about $70 a month for 36 months? Thanks
A few points:
- The $25 minimum is the calculated payment based upon SSL amount and loan term; it does not mean you need to pay at least $25 per month.
- If you prepay the loan down under 9%, then your next payment is pushed forward months, or even years (depending upon what you paid). Said another way, there will be no $25 per month payment due.
- If you pay it down to under 9% you get the maximum FICO boost in your scores.
@Amiashu12 wrote:Thanks for your help again. I talked to couple of CU and they all told me that if I pay my loan down under 9% then my duration of the loan will be shorten. Would that be ok? Which questions should I be asking when I call them back? Thanks.
PenFed doesn't work that way, the duration of the loan remains unchanged and the next payment gets pushed way out.
@Amiashu12 wrote:Thanks again. Here's another question. I called my credit union and they do offer ssl. However, they only report to Equifax. Would this help at all? And, let's say if I do $1000 ssl for 2 years and make payments on time, will this boost credit score? Thanks.
It will help your Equifax scores, it won't do diddly for your Experian or your TransUnion scores.