(updated with scores) How much of a score drop from paying off only installment account?

[Anonymous]

I am really struggling with this. I have an installment loan through Best Egg. It's a personal loan with a whopping 18.99% APR. I owe ~1600 on it and the loan is due to be paid off 8/2020.

But I am seeing that you actually take a FICO hit for paying off your only installment loan that's active. Being that the original loan was $2500, I still owe ~64% on it so what would I be looking at FICO wise for paying it off? 10-15 points?

I would honestly like to get out from under this stupid loan and I have the ability to make massive payments (I could technically knock it out in two months if I really wanted to) but I was thinking of doing a BT to my NFCU Plat card for 0% for 12 months but if its going to hurt my scores too much (650-670 ranges) then obviously that's a bad idea.

But I wouldn't have any payment obligations at all anymore... Which sounds quite nice. I just don't want to trigger AA for my credit score dropping for me being responsible and paying off my debt. 

[SouthJamaica]

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@Anonymous wrote:

I am really struggling with this. I have an installment loan through Best Egg. It's a personal loan with a whopping 18.99% APR. I owe ~1600 on it and the loan is due to be paid off 8/2020.

But I am seeing that you actually take a FICO hit for paying off your only installment loan that's active. Being that the original loan was $2500, I still owe ~64% on it so what would I be looking at FICO wise for paying it off? 10-15 points?

I would honestly like to get out from under this stupid loan and I have the ability to make massive payments (I could technically knock it out in two months if I really wanted to) but I was thinking of doing a BT to my NFCU Plat card for 0% for 12 months but if its going to hurt my scores too much (650-670 ranges) then obviously that's a bad idea.

But I wouldn't have any payment obligations at all anymore... Which sounds quite nice. I just don't want to trigger AA for my credit score dropping for me being responsible and paying off my debt. 

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Pay it off.

No one will take adverse action because your score drops.

[Anonymous]

And the impact to my score? I've been rebuilding since 2014 so my score is pretty low given that... I am not planning on any new credit apps for awhile but if its going to drop me back to the "I can't get anything" level, I may hold off until some inquiries fall and some baddies fall in June and just pay like half of it now. It can't be having too much of a positive score impact with such a high balance remaining though can it?

[Pikaboo-icu]

Why not open a small secured loan through NFCU, as soon as they give you the funds, pay it down to 8.9%.

You could close the other loan and not only will you not take a hit, you'll get a score bump, in the end. 

I'm not sure of the amounts/loan lengths but NFCU allows you to pay the loan way down and will keep it open for the full 36 months (or however long your term is). 

My car loan is paid though 2020 lol. It's still only 50% paid so my score suffers from it a little but I'm going to fix that fairly quick after Christmas..

[Anonymous]

You have a desire to improve your score and sharply lower the amount of interest you are paying on that loan.  A solution that will do both is to pay the loan down but not off.  You may even find that, once you pay off a huge chunk of the loan, the loan handler will push the due date of the next payment way many months into the future.  Some loan handlers do that.

BTW, you don't mention what your current CC utilization is.  Can you let us know that too?

[Anonymous]

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@Pikaboo-icu wrote:

Why not open a small secured loan through NFCU, as soon as they give you the funds, pay it down to 8.9%.

You could close the other loan and not only will you not take a hit, you'll get a score bump, in the end. 

I'm not sure of the amounts/loan lengths but NFCU allows you to pay the loan way down and will keep it open for the full 36 months (or however long your term is). 

My car loan is paid though 2020 lol. It's still only 50% paid so my score suffers from it a little but I'm going to fix that fairly quick after Christmas..

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Because I have taken too many HPs right now. I need a break from NFCU HPs lol.

No really its because I just opened the Plat with NFCU specifically to BT some balances including this loan and now I'm hearing that you get like some massive score drop of up to 30+ points for paying off your only installment loan!

[Anonymous]

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@Anonymous wrote:

You have a desire to improve your score and sharply lower the amount of interest you are paying on that loan.  A solution that will do both is to pay the loan down but not off.  You may even find that, once you pay off a huge chunk of the loan, the loan handler will push the due date of the next payment way many months into the future.  Some loan handlers do that.

BTW, you don't mention what your current CC utilization is.  Can you let us know that too?

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Best Egg is highly unlikely to do the payment date push. It would be nice but they won't do it and my payments won't drop either so paying it down will give me a boost until the $89.48 monthly payment wipes out the rest of it. So three months and the end result would be the same but I guess that would give me time to figure out another loan with the credit boost.

CC utilization is 1.7% once my new limits report, my current reported utilization is 2.3%

[Anonymous]

Pika-boo's suggestion is great.  Your plan could be (in this order):

(1) Pay down a bunch of your debt (all high interest CC debt and most of the high-interest loan). 

(2)  Open an SSL at Navy

(3)  Pay the SSL down to 8%.

(4)  Pay off the high interest loan.

[Pikaboo-icu]

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@Anonymous wrote:

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Because I have taken too many HPs right now. I need a break from NFCU HPs lol.

No really its because I just opened the Plat with NFCU specifically to BT some balances including this loan and now I'm hearing that you get like some massive score drop of up to 30+ points for paying off your only installment loan!

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If I recall correctly there is no HP for the SSL through Navy..

That DP can be easily checked as many peeps have the SSL. 

[Anonymous]

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@Anonymous wrote:

Pika-boo's suggestion is great.  Your plan could be (in this order):

(1) Pay down a bunch of your debt (all high interest CC debt and most of the high-interest loan). 

(2)  Open an SSL at Navy

(3)  Pay the SSL down to 8%.

(4)  Pay off the high interest loan.

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Right now the SSL isn't an option, I can't make a deposit big enough to have one long term and I'm also not allowed to have more than $2000 in countable assets which includes anything in a savings, its a big risk for me to try to do that.

I am just wondering what kind of a hit I am looking at if I go through with paying off the loan. I don't have any high interest (or any balances I'm paying interest on) besides this loan but if its going to seriously hurt me to close it, I will just keep paying the interest as I have Medicaid for some serious health issues so I don't want to risk it by passing asset limits, I already came close this last time because I had my bank statement generate with a $560 balance which combined with my direct deposit put me over the $2000 threshold.