Adding an installment loan -- the Share Secure technique

[Anonymous]

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@Anonymouswrote:

Implementing the SS Loan Technique:

We are looking into alternatives and will eventually create a new thread once we have reliable vetted options.

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Crazy question:

If an alternative cannot be found, why not just go with a credit union that does a soft pull, and get the 60 month term for the lower payment amounts, and pay off 90% of the balance, and let the auto payments run and close out the loan over the next 12-15 months?

Won't you still get the double benefits for the 12-15 months that this is going on for?

Then, if you wanted to contunie, just repeat the process?

[Anonymous]

That's one thing we are looking for.  It's a good fit for someone who is preparing for a first car.  They use the SS loan to boost their score, they get the car loan, and then it doesn't matter that they have to pay it off in five months.  That's a real need.

Paying an SS loan down to 8.9%, however, does not enable you to keep the loan open for another 15 months.  If you do the math, you'll see that the loan term will get effectively shortened to five months.  So laddering an SS loan every 15 months is not an option.

[Anonymous]

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@Anonymouswrote:

Paying an SS loan down to 8.9%, however, does not enable you to keep the loan open for another 15 months.  If you do the math, you'll see that the loan term will get effectively shortened to five months.  So laddering an SS loan every 15 months is not an option.

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That's interesting. You can't trust anyone these days. The broker with whom I spoke said that if I take a secured personal loan with a 60 month term that requires a balloon payment at the end, I could effectively pay down the value of the loan immediately to below 9%, and since the monthly payments are so much lower with the balloon due at the end, that it would run for 12-15 months before the loan would trigger the final payment without defaulting on payment terms. I guess I'll have to revisit.

Have you found a difinitive solution? Or shall I get more details on the balloon version in the event it is correct?

[Anonymous]

Sure, do the research and let us know!

[Anonymous]

So I talked to a local credit union in Connecticut. They told me there won't be any credit inquiries soft or hard on my report to get approved for SS loan. When I asked about the term and payment plan, this was his response.

"You would choose the term based on a comfortable payment amount. The "term" will always reflect the term that was chosen, but paying it off early is an option. The monthly payments will never decrease, they will remain the same until it is paid off."

So in my opinion, this is not what we are looking for. Anyone else able to find anything?

[Anonymous]

Yeah, not what you're looking for, as if the monthly payments remain the same, once paying it down to a single-digit utilization amount the monthly payments still being high would bring it to term too fast.

[Anonymous]

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@Anonymous wrote:

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@Anonymouswrote:

Implementing the SS Loan Technique:

We are looking into alternatives and will eventually create a new thread once we have reliable vetted options.

---

Crazy question:

If an alternative cannot be found, why not just go with a credit union that does a soft pull, and get the 60 month term for the lower payment amounts, and pay off 90% of the balance, and let the auto payments run and close out the loan over the next 12-15 months?

Won't you still get the double benefits for the 12-15 months that this is going on for?

Then, if you wanted to contunie, just repeat the process?

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I was also wondering about this. What benefits are there for those of us willing to take the hit/HP? Any benefit to a short term loan in this case instead of 60 months?

I'm currently cleaning up my reports because I'm possibly trying for a car loan within the next few months.  Getting approed is easy but I need a score boost.  I can't even get a CLI with Discover because of a bs derog I am fighting on my reports so I am looking for other things I can do without applying for more cards.

[Anonymous]

You will get the full benefit if you pay the loan down to under 8.9%.  Just bear in mind that for many lenders you still have to continue to make the same monthly payment -- and therefore paying to 8.9% will cause a 60 month loan to get paid off in maybe 5 months.  If you are simply trying to get a boost prior to a car loan there is no problem with that though.

What you want is a lender that will let you get a true SS loan.  The fact that it is secured will ensure your approval, whereas for an unsecured loan your already low score will likely ensure a denial.

[Poppa]

I just bought a house and it has reported to all 3 bureaus.  I can go ahead and pay off my SSL now without any point loss right?

[Anonymous]

You can.  Or you can just leave it open.  That way it will be a bit older when it does finally fall of your profile.

PS.  Some people have argued that FICO's negative reason statements imply that it may treat mortgage and non-mortgage debt differently.  If that is true, there might be some advantage in having open non-mortgage debt at < 8.99%.

Your call.  Wish I could give you a certain answer.