@satio wrote:
@Streetervillelady wrote:
@satio wrote:
@Morphyyy wrote:What's the timeframe you need to have that paid down to 8.9%? And any other good places to do the technique with that are Easy pay down?
The reason for seeking a 5 year term is so that you do not have to repeat the process for 5 years incurring repeated new loan accounts which also affects your overall average age of accounts.
The benefit is an installment account for those that have no installment combined with having an active loan that is < 8.9 balance.
If you already have a relationship with NFCU then you are in the door and it is an easy process.
The minimum amount NFCU will allow for a 5 year term is $3000 which is why people choose $3010. You will need $3010 to start with but you will only actually require to tie up $270 of that (decreasing slightly each month as you pay it down further and the funds remaining against the balance is released back to you).
You need $3010 on deposit in NFCU share savings. Initiate an SSL for 5 year term with NFCU. They will lock the loan amount from your share savings account for $3010 and then turn around and deposit $3010 into the account of your choosing. Once your loan is funded, you turn right around and make an immediate payment to bring it down to < 8.9% balance, approx $2735 using the $3010 they loaned you.
This will push out your next payment date to about 4 years and 6 months from your starting loan date. The majority of the payment ($2735) will now release those funds in your share savings less a couple of dollars of interest that you may have incurred.
If the funds you deposited ($3010) you funded from somehere else, you will then have approx $2735 to push them back to where you funded them from.
From this point, your next payment is actually not due for over 4 years but make a payment periodically to get active payment history on the account.
In my circumstance, I pay $1 on the first of every month.
The only thing I would suggest is don't advertise to anyone at NFCU what you are planning to do in terms of immediately paying it down. There are very few SSL options remaining that work this way, re: you can pay it down and it pushes the due date our to near the end term of the loan rather than just shortening the loan term. I believe the consensus here (and elsewhere) is there is no need to put up any alerts that may cause NFCU to rethink how they manage the loan term with such a payback plan.
Good luck.
Thank you for providing this detailed process. I'm going to follow it to the letter.
Appreciate the positive feedback.
Each person's CRA profile has its own unique factors but in my situation I saw the following point lift as a result of adding this account and pay down:
EX +16
EQ +16
TU +13
Onward and upward!
@satio So far, so good. I'm waiting for the loan to appear in my account summary to pay down to 8.9%.
I'm trying to be as proactive as I can. COVID-19 has exposed credit/debt cracks and fault lines. Having no credit mix (retail only) had not been an issue. Now I'm watching Neiman Marcus (and Bergdorf Goodman). A failure to restructure their debt will mean account closures. Losing that available credit could negatively effect my profile, at a time I want to hold on to cash.
@lowspender wrote:Bumping this thread...
@satio wrote:You need $3010 on deposit in NFCU share savings. Initiate an SSL for 5 year term with NFCU. They will lock the loan amount from your share savings account for $3010 and then turn around and deposit $3010 into the account of your choosing. Once your loan is funded, you turn right around and make an immediate payment to bring it down to < 8.9% balance, approx $2735 using the $3010 they loaned you.
In my circumstance, I pay $1 on the first of every month.Appreciate your detail here. I usually see $5 monthly autopay amounts from members who post their ssl results with navy. Did you cut it very close in terms of immediately repaying most of the loan, and if so why (that is an uncommonly low number, from what I've seen).. or did you get a shorter term/lower amount ssl to begin with? Or whatever led to that result. Not sure what I'm missing..
The method and loan term that I secured is what is listed in my original response post on the topic. $3010 with a 5 year term and an immediate 2735 (or there abouts) payback. This pushed my due date to Feb 2024 about 4 years 6 months. My payment amount if I had been making monthly payments was $54. Four years + 6 months is 54 months. By paying $1 per month I am effectively reducing my Feb 2024 payment amount by $1 each month.
When I get Feb 2024 my payment due will be 0$ or $54 by March 2024. At that time I will have 5 remaining payments of $54.
Some may choose to pay a larger amount than $1 in order to not have 5 payments of $54 due in 4 1/2 years.
To me it doesn't matter.
No because to maximize Fico scores you only need 1 open installment loan. So it could drop your score because of it being a new account.
Starting Score: 494 503 521
