Adding an installment loan -- the Share Secure technique

[Anonymous]

The average age includes closed accounts.

[Anonymous]

My credit union offers this SSL

SHARE SECURED

• Borrow against the funds in your Credit Union Regular Share Savings
• Low fixed rate
• No penalties for early repayment
• Savings remain intact and earn dividends

With these terms is there anything I need to ask them besides if early payments will shorten the terms of the loan?

[Horseshoez]

@Anonymous, which credit union are you thinking to go with for your SSL? 

[M_Smart007]

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@Anonymous wrote:

My credit union offers this SSL

SHARE SECURED

• Borrow against the funds in your Credit Union Regular Share Savings
• Low fixed rate
• No penalties for early repayment
• Savings remain intact and earn dividends

With these terms is there anything I need to ask them besides if early payments will shorten the terms of the loan?

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You might ask, if it is a HP?

[Ultros]

Most CUs offer SSLs. The problem is getting a good one, which meets the criteria in the first post of https://ficoforums.myfico.com/t5/Personal-Finance/The-Quest-for-an-SSL-alternative-to-Alliant/td-p/5...

[xenon3030]

I paid down ~90% of the loan from my Alliant saving account. Is it fine if I tranfer ~90% of my saving account to my checking account in another bank? 

[Anonymous]

I just made the last payment on my Alliant SSL

1) Automatic payment glitched out. I set it up for the full amount but got an email saying it exceeded the loan balance and there was 6 cents unpaid

2) Loan was opened 10/2016 so by prepaying you do not get the full 5 years.

[Horseshoez]

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@Anonymous wrote:

I just made the last payment on my Alliant SSL

1) Automatic payment glitched out. I set it up for the full amount but got an email saying it exceeded the loan balance and there was 6 cents unpaid

2) Loan was opened 10/2016 so by prepaying you do not get the full 5 years.

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By "prepaying" are you saying paying the loan in full prior to the end of the original term?  If that's the case, my understand is an SSL will act just like any other loan, it will be marked as paid, and then closed.

[USMC_Winger]

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@Horseshoez wrote:

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@Anonymous wrote:

I just made the last payment on my Alliant SSL

1) Automatic payment glitched out. I set it up for the full amount but got an email saying it exceeded the loan balance and there was 6 cents unpaid

2) Loan was opened 10/2016 so by prepaying you do not get the full 5 years.

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By "prepaying" are you saying paying the loan in full prior to the end of the original term?  If that's the case, my understand is an SSL will act just like any other loan, it will be marked as paid, and then closed.

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I think he's saying "by prepaying the loan," the interest owed is significantly less than the original calculation.  He's 5 months short of the original expiration date, and no, Alliant will NOT forgive that 6 cents.  Pay up!

I think I've avoided this by recalculating the interest owed if I set my Navy Fed SSL to auto-pay $1 every month until the final payment.  I paid my loan down from 8.9% of the original $3,000 loan to $102.05 eight days before the first payment was due and set up auto-pay for $1.  If my calculations are correct, my final payment will be a few cents more than the original final payment 59 months later.

ETA:  Nothing special about the 8 days prior to the due date.  That's just when I got around to doing the calculations.

[Ultros]

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@USMC_Winger wrote:

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I think I've avoided this by recalculating the interest owed if I set my Navy Fed SSL to auto-pay $1 every month until the final payment.  I paid my loan down from 8.9% of the original $3,000 loan to $102.05 eight days before the first payment was due and set up auto-pay for $1.  If my calculations are correct, my final payment will be a few cents more than the original final payment 59 months later.

ETA:  Nothing special about the 8 days prior to the due date.  That's just when I got around to doing the calculations.

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Hm, how would you go about doing this? Is this an action that you have to perform with the bank (please re-amortize my loan), or something else?

From what I understand about the loans, unless it is re-amortized you won't get the full loan term, it will roughly be reduced by X%, where X is the percentage of interest paid in total if you made all payments according to the original amortization schedule.

My understanding is this:

If you open a loan for $1000 for a term of 100 months and a total payment of $1200, your monthly payment is $12, pre-paying $912 would shift your due date by 76 months, but only leave $88 on the loan. The $88 of balance will of course continue to accrue interest, but it won't be enough to create 24 months' worth of payments, which is why the loan will end early.