I am looking forward to buying a house in a few years (likely 3) and have started saving for it. I have enough saved to pay off the remainder of my auto loan, but I am concerned that doing so might have a negative impact on my credit score (which in turn would impact my ability to qualify for mortages in the future). The interest rate of my savings account is almost equal to the interest rate of my car loan. Does it just make more sense to pay over time?
Related posts:
- What is the interest rate for rolling over negative equity into a new car loan?
- If I apply for an auto loan at a car dealership, which credit bureau do they usually pull my credit score from
- Is it possible to refinance a car loan with one’s current auto loan bank or institution?
- Can I get a car/auto loan?
- How much does a small used auto loan impact my credit?
{ 13 comments… read them below or add one }
paying off your debt as fast as possible is always the most sound advice.
all lenders would rather have a debt free client when they loan out hunderds of thousands of dollars-to one who’s still paying off cars,credit card bills,etc.
Pay it off.
early pay off will not have a negative impact
Pay it off
no, if anything it will improve it
If you have the money to finish paying off your car now, do it!
It will not have a negative impact on your credit. If anything, it could help. Companies are always happy if you pay them earlier then planned. They will never refuse your money.
Paying your car loan ahead of time will certainly have a positive impact on your credit rating…Your rating is based on how you pay your bills and keep them up to date..Mainly making monthly payments on time..
There would be no negative impact on credit score from paying off the car loan early. Check with the lender to see if there are any prepayment penalties. If there are none, then pay away. You will decrease the amount of interest you pay over time. Then you have more money available to save for your house. If you do not have an auto loan payment at the time you apply for the mortgage, that will actually be better for you. Lenders compare the total amount of debt you pay monthly with the total income you have monthly as a criterion of rmortgage approval.
It will help you in the long run if you pay off early cause alot of morgage companys look at it as a early pay of which is a good thing. So do it if anything it will help your credit score:)
no i would NOT pay it off with you intrest rate in your savings and your car loan the same. what happens if a emergeny happens, then you need money fast and have to use 19 percent apr credit card for it. if you pay on time or double pay recomended would be just fine. save for a downpayment.
No,
It will help your credit score
No.
Thank you for sharing. Much appreciated and thought provoking! You should also check out this site oncar insurance resources. I am now saving a couple hundred a year. Check it out.