Affect of paid down SSL on DTI?

[Auricom]

Let's say I get an SSL with a monthly repayment of $100, but pay the loan down to 8.9% and there is no repayment due for years... does my monthly payment still report as $100 on my reports?

I'm considering a 10yr SSL but don't want a high number on my DTI. 

[FireMedic1]

You pay it down and each month it will say no payment due with balance. Next due date is whatever it was pushed out to. Now until it gets to the date when the time runs out. Then it will say amount owed and due date. Ive done 2 SSL's with Alliant in the ole days and NFCU. Never seen 10 yrs. Had 5 with ACU and 3 with NFCU.

[SouthJamaica]

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@Auricom wrote:

Let's say I get an SSL with a monthly repayment of $100, but pay the loan down to 8.9% and there is no repayment due for years... does my monthly payment still report as $100 on my reports?

I'm considering a 10yr SSL but don't want a high number on my DTI. 

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On my NFCU SSL the monthly payment amount reported to the credit bureaus remained the same. So paying it down did not improve the DTI at all.

If you're planning to apply for a mortgage, the paid-down-SSL is no help anyway, since it usually has little or no effect on your mortgage scores.

[CH-7-Mission-Accomplished]

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@Auricom wrote:

Let's say I get an SSL with a monthly repayment of $100, but pay the loan down to 8.9% and there is no repayment due for years... does my monthly payment still report as $100 on my reports?

I'm considering a 10yr SSL but don't want a high number on my DTI. 

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Navy still reports the monthly payment on my two SSL's.   One was opened for $25k on 6/1/2021 for $25K.    Immediately paid down to $300.   The next payment is due 3/14/2026.   Credit report shows this information with the monthly payment at $300/payment.   But underwriters don't count installment payments when there are 10 or less remaining payments so it won't hurt you.  

I have a second Navy SSL opened for $30K on 4/15/2021.   Immediately paid down to $50.   Monthly payment reports as $50.   Next payment is 3/14/2033.   Again, it would not count for loan underwriting since under 10 payments reporting.    I should not have paid this down so far.   $300 would have been a much better choice.   They may one day decide to write off the $50 so they don't have to service it.

I also had a SSL with Alliant CU for $15K, but when I decided to get a car loan with them, people on here told me to just pay it off since I would have another installment loan reporting.   This was not good advice.   My score dropped 15 points by paying off the mostly paid off SSL ($50 owing on $15K).    When I conftronted the people who advised me to pay off the SSL, they gave me a BS answer like, "Well, at least you don't owe any money on that loan," or something lame brained.   It was a non-answer and bad advice.

The auto loan I opened with Alliant was for about $32K for 72 months.   I paid it down to $50 in 24 months and the next payment due was something like three years down the road.   I thought I was good for the installment loan mix (I have no other installment loans open).   After about six months Alliant CU decided to just "forgive" the $50 balance on my auto loan.   I was beyond furious.   They could not understand since they thought they were doing me a favor -- and they couldn't undo it without a new credit check, etc., etc.   I explained to the loan person that their actions caused my FICO score to drop by 25 points.   His response was that "nobody knows how FICO scores work."    Uhmmmmmm, yes we do.

[EAJuggalo]

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@CH-7-Mission-Accomplished wrote:

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@Auricom wrote:

Let's say I get an SSL with a monthly repayment of $100, but pay the loan down to 8.9% and there is no repayment due for years... does my monthly payment still report as $100 on my reports?

I'm considering a 10yr SSL but don't want a high number on my DTI. 

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Navy still reports the monthly payment on my two SSL's.   One was opened for $25k on 6/1/2021 for $25K.    Immediately paid down to $300.   The next payment is due 3/14/2026.   Credit report shows this information with the monthly payment at $300/payment.   But underwriters don't count installment payments when there are 10 or less remaining payments so it won't hurt you.  

I have a second Navy SSL opened for $30K on 4/15/2021.   Immediately paid down to $50.   Monthly payment reports as $50.   Next payment is 3/14/2033.   Again, it would not count for loan underwriting since under 10 payments reporting.    I should not have paid this down so far.   $300 would have been a much better choice.   They may one day decide to write off the $50 so they don't have to service it.

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Couple questions: Why have multiple SSLs at one time?  My understanding is that you get a boost from having one because it helps credit mix, but why a second?  And since when does Navy offer SSls for 12 years?  When I had my SSL with them the limit was 5.

[Revelate]

So get a smaller SSL; you're not going to have a $100 monthly payment with the usual SSL sizes that are $500 or less over 5 years and you can pay it down to much smaller than 8.9% anyway as just that's the maximum scoring threshold, I left my old Alliant SSL at $5 / $500 for years.

A SSL should never be make or break on a mortgage anyway, to be clear a SSL is to use money you have no need for... and if it's a problem on your DTI you would be better off with cash in hand most likely than the fairly minimal score increase (less than a mortgage tier) on the older generation of scores.