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Should I take a personal loan of 17% to help with credit?

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Hutchman92
Valued Member

Should I take a personal loan of 17% to help with credit?

Hello, I am rebuilding credit. I was approved for 10k loan from navy fed. I have about $2500 in high untested credit card that I could pay off in a month and have a could older charge offs that will fall off in 1-3 years. I also have student loans in deferment and an auto loan I just refinance for 3.3% down from 10.5%. My question is would taking out a personal loan at a high intesterst rate help my credit to pay off in half the time or would it just hurt my credit and cost extra money for interst since I already have a decent installment revolving mix? If there's not a score benefit then I will just pay off credit card debt nect month and pass on high interest personal loan 

3 REPLIES 3
simplynoir
Community Leader
Mega Contributor

Re: Should I take a personal loan of 17% to help with credit?

If the $2500 in credit card debt can be paid off in a month I really don't see any reason to get the pre-approved loan. You did a good job refinancing the auto loan rate you have and sounds like the charge-offs will fall off in due time. Like you pointed out at this point you'd just be paying more interest for a short term goal/gain. If this had been a situation where you were looking to consolidate your credit card debt into one loan and paying it off rather quickly I could see the benefit even with the high APR

 

In my opinion pass on it and keep up the good work you've been doing so far

Message 2 of 4
SouthJamaica
Mega Contributor

Re: Should I take a personal loan of 17% to help with credit?


@Hutchman92 wrote:

Hello, I am rebuilding credit. I was approved for 10k loan from navy fed. I have about $2500 in high untested credit card that I could pay off in a month and have a could older charge offs that will fall off in 1-3 years. I also have student loans in deferment and an auto loan I just refinance for 3.3% down from 10.5%. My question is would taking out a personal loan at a high intesterst rate help my credit to pay off in half the time or would it just hurt my credit and cost extra money for interst since I already have a decent installment revolving mix? If there's not a score benefit then I will just pay off credit card debt nect month and pass on high interest personal loan 


It would not help your scores and would get you further mired down in debt

 

Don't even think about it


Total revolving limits 650200 (529700 reporting) FICO 8: EQ 706 TU 714 EX 715

Message 3 of 4
Anonymous
Not applicable

Re: Should I take a personal loan of 17% to help with credit?

I agree with the above responses. Taking out the loan will not help your credit, in fact it would likely lower your score due to the new hard inquiry, drop in age, and increase in installment utilization. Just continue your strategy that has already worked well for you!

Message 4 of 4
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