Thank you for sharing the data points.
Thanks for sharing. I take it that auto loan is NFCU??? I know their auto loans work like their SSL. You could pay that auto loan off now actually and still be good.
@CH-7-Mission-Accomplished wrote:
@spiritcraft1 wrote:Thanks for sharing. I take it that auto loan is NFCU??? I know their auto loans work like their SSL. You could pay that auto loan off now actually and still be good.
The auto loan is actually through Alliant. Their loans push out the next payment due date.
Thanks for that DP...
@CH-7-Mission-Accomplished wrote:So a couple of months back I shared how I had gotten a 35K SSL from Navy, due in 15 years, and paid it down to $50. I was chastised by a lot of people for paying it down too far. Well it's still standing. But I do think I should have paid it down to only $500.
BUT I also had an auto loan from Alliant Credit Union. The loan was opened 01/2019 for 31K and I paid it down to $50. Next payment due in July 2024.
Guess what? Alliant wrote off the $50 balance. I spent a lot of time trying to reach them, the frontline people had no idea what I was talking about, and finally somebody from loan servicing contacted me and said they just wanted to do me a favor so I could get my title right away. I explained to them that I appreciated the courtesy, but I was wanting that loan to last until 07/24. I also asked if they could reinstate the loan, and they said they could, but it might screw up my payment history or whatever. I just thanked them for their courtesy. I tried to explain to them about the whole 7.9% thing and they just glazed over and told me that nobody knows how FICO works. My payment had been $477. I should have left the balance at $500 because I don't think they would write that off as a courtesy.
But since I only owe $50 on my $35K SSL from Navy, I decided to open a new SSL with Navy for 25K. It's only good for 5 years. I paid it down to $500. Meanwhile the $50 SSL is still there.
Before people jump all over me, I want to point out that if you open a $500 SSL, and pay it down to 7.9%, you would only owe Navy $39.50. So my little $50 balance is a lot more than your $39.50 balance -- so Navy should be just as inclined to write off your $39.50 balance as my $50 balance.
And I have no allusions that Alliant was doing me a favor. They simply decided that the cost of servicing a loan with a $50 balance for three more years was more expensive than just writing it off. And this would be the case with your Navy SSL for $39.50/$500.
So I promised that if I got nailed on a low balance installment loan that was written off, I would fess up. So this is my confession.
For those wondering why the new 25K SSL, my whole goal is to hit 850 the day my BK7 falls off, which will be two years from August (less early exclusion). I don't want any new loans or credit cards for a full 24 months prior to that date. And if Navy wrote off that $50 SSL, I would have to open a new SSL during a period less than 24 months from BK7 falloff date.
So lesson learned.
You're better off this way.
(a) It's better to have a clean title. Sometimes it can be complicated getting that taken care of.
(b) There's no scoring benefit in your FICO 8's and 9's from having 2 mostly paid off loans vs having 1 mostly paid off loan.
(c) There might be some scoring benefit in your mortgage scores from having one less account with a balance.
(d) Your DTI is significantly lowered.
(e) You received a $50 gift.
All I would be saying to Alliant is "thank you very much".
