I am 46 and had bad credit, but have a new car and payments, I can pay it in full, 23K, but took a 10K loan, how long should i keep the loan??
2006-07-03 11:24:03 · 9 answers · asked by xcybergypsyx 2 in Business & Finance ➔ Credit
I have 75K in the bank and the intrest is paying the note....but need to get good credit again...
2006-07-03 11:30:34 · update #1
Its thru Honda Corp...
2006-07-03 11:35:00 · update #2
as quickly as possible but if you are doing it to build your credit make double payments for 6 months to a year then pay it off. you want it to say "paid as agreed" on your credit report.
take note in some states there is prepayment penalty (if you pay it off quicker than your agreed payment you pay more) so know what type of loan you have before adding additional payment money you just might be throwing money away
2006-07-03 11:32:31 · answer #1 · answered by zqx357 5 · 0⤊ 0⤋
With 75K in the bank, you don't need to worry about your credit score. Any bank will see that you can now manage your finances, so pay off the car and keep the interest for yourself.
BTW - Never EVER buy a new car - they depreciate too quickly. Truly rich people (ok, truly rich NORMAL people) drive older cars, because they're more concerned with building wealth than looking impressive. Check out "The Millionaire Next Door"
2006-07-03 15:31:44 · answer #2 · answered by homeschoolmom 5 · 0⤊ 0⤋
Keep the loan until you can qualify for other types of credit like credit cards. Using the credit cards for things that you need and would buy anyway (like gas for your car) and paying them off every month is a good way to raise your credit score.
Remember, make all your payments on time and never let your credit card balances exceed 50% of your credit limits.
2006-07-03 15:10:34 · answer #3 · answered by Anonymous · 0⤊ 0⤋
The only reason to keep paying off the loan for a while would be to get your credit re-established again. I am not expert, but I would think a minimum of 3 months.
2006-07-03 11:28:28 · answer #4 · answered by Sharon S 1 · 0⤊ 0⤋
Depends on who you got the loan from: a bank or "credit union".
Successfully pay off a bank loan, your credit score goes up in your favor; credit union loans do NOT and are a waste of time for those trying to build their credit score.
Bottom line: 3 or 4 years ought to do it well.
2006-07-03 11:28:41 · answer #5 · answered by Mr. Wizard 7 · 0⤊ 0⤋
Depends on what your personal finance situation is? Take the interest rate on the loan, i.e. 7%. If you have any investments that make more than 7% per year, this is a lower priority.
If you have debt over 7% that is not tax deductible, pay that debt first.
So, unless you have any investment that makes over a guaranteed payment of over 7%, pay the minimum monthly balance on your loan.
2006-07-03 11:28:48 · answer #6 · answered by Mister_fin 3 · 0⤊ 0⤋
The most important credit - is the most recent 24 months.....if you can demonstrate positive credit handling for 24 months w/ the car payment....that may price the price you pay to reestablish your credit.
Lenders don't totally discount the old bad debt, but current positive credit is huge
2006-07-03 12:38:50 · answer #7 · answered by Paula M 5 · 0⤊ 0⤋
Why would you want to pay more than the asking price for the car by paying interest on a loan if you can pay it outright???
2006-07-03 11:29:29 · answer #8 · answered by Windseeker_1 6 · 0⤊ 0⤋
I would keep it as long as possible to start getting a good credit history.
2006-07-03 11:29:39 · answer #9 · answered by garciasgirl9 3 · 0⤊ 0⤋