I was thinking of paying double my car payment per month so that I can pay it off earlier. Is it beneficial to do this, or should I just make the minimum monthly payments? Which is better for building my credit? Thanks!
2007-10-03 04:14:51 · 1 answers · asked by Hitch™ 3 in Business & Finance ➔ Credit
Anytime you complete a long term loan (like a car note) you help your credit. Paying regularly over a long time helps too. Credit takes time to build or repair. There's rarely a quick fix.
The advantage to paying a loan early is the money you'll save in interest. If you have a zero% loan, then paying early is pointless. If you have interest, the sooner you pay, the less you'll pay.
I agree with the person above who advises against blowing all your cash and missing a payment. Before you do anything, make sure you have a safety fund in the bank.
2007-10-03 04:40:31 · answer #1 · answered by billybudd1313 3 · 3⤊ 0⤋
Not sure about car loans, but for home mortgages you can ask for a pay-out schedule which shows how much debt and how much interest is included in each payment. That way you can request that the extra payment be applied to the principal. The main benefit in paying off an installment loan early is the savings in the high interest rate. Doesn't really help your credit rating all that much--but sure doesn't hurt it either!
2007-10-03 04:48:16 · answer #2 · answered by gwhillikers2000 5 · 0⤊ 0⤋
that's continually financially beneficial to pay off ANY own loan as long as doing so does not steer away from you from eating and retaining the lighting fixtures on. you have ALREADY lost the version between the unique own loan volume and the present fee. If the motor vehicle is totaled, coverage will pay the linked fee of the vehicle right this moment formerly the collision and additionally you will nevertheless owe the economic employer the full stability of the interior maximum loan. i don't understand what the single time fee of $250 grow to be surely for, yet there is no way it coated hollow coverage for the existence of a $14,000 own loan.
2016-10-20 21:53:32 · answer #3 · answered by ? 4 · 0⤊ 0⤋
Usually there's a fee for paying off your loan too early, but the interest will get you if you only make the minimum payment. Making payments regularly over a long period of time is better for your credit...
2007-10-03 04:23:48 · answer #4 · answered by csc 1 · 0⤊ 0⤋
Paying on time is the most important thing to build your credit. Paying off early won't really do much for your score. You would save money on interest.
2007-10-03 04:37:23 · answer #5 · answered by bdancer222 7 · 1⤊ 0⤋
Sometimes it is better to pay and build your credit but it also depends on your interest rate. If it is a high rate I would pay some extra and try to pay it off a little early.
2007-10-03 04:24:02 · answer #6 · answered by Robin L 6 · 1⤊ 0⤋
I would pay it off asap. Once you pay it off its yours. If something happens and you lose your job or something and you cant make the car payment then they are gonna come and take your car. If its payed off and you lose your job then the car is yours to keep.
Sure, if you keep making payments every month it keeps you fico score up. People worship at the alter of the almighty fico score too much. You have to keep getting loans and making payments to have a high fico score.
Pay off the car. It gets better gas mileage without a payment book dragging behind it.
2007-10-03 08:31:25 · answer #7 · answered by heybulldog 5 · 6⤊ 0⤋
I payed my car off early, I had the car a year and paid on it like I was suppose to and when the i year mark came around I payed it off It actually saved me ALOT of money like almost 500.00 worth. It was nice to get the car payed off and have one less bill to pay but make sure you pay on it for atleast a year so it will help your credit.
2007-10-03 04:25:47 · answer #8 · answered by marie76444 3 · 3⤊ 0⤋
It's more important to have six months' income in savings than it is to make double payments.
If you make double payments for six months, and then something happens and you miss a payment, that's really bad for your credit. If you stick that extra money in a savings account, and you use it to make that seventh payment, that's *good* for your credit.
2007-10-03 04:19:26 · answer #9 · answered by Anonymous · 2⤊ 1⤋
It doesn't work exactly the same way a house payment prepay does.
Car loans load up the interest on the FRONT of the loan, you don't really dig into principal until the very final payments.
2007-10-03 04:22:54 · answer #10 · answered by susiegasser 4 · 0⤊ 3⤋