Loan and credit advice?
April 20th, 2010 | 
Author: gear jammer asked:
I had car loan 7 months now I can refinance at a lower rate.
But still paying 13%. I want to rebuild my credit.
The new loan I will take I had planed to payoff car in 6 months.
Balance is 15,000 but I put 5,000 down and had planed to pay 1,500 to 3,000 a month to get paid off to aviod the big interest charges.
Bank said I should not pay off so fast may look bad on credit report if take loan of 10,000 and pay off within 6 months.
I was told pay loan down to a few thousand and then just pay normal payment of 250 a month to show on time payments.
But the interest charges make me sick. I want to build credit but at same time not pay sub prime interest. What is best route to pay off with helping credit too.
Once paid off car loan only other revolving acct is a credit card.
I listen to Dave Ramsey and cant wait to be Debt Free.
Should I pay off within 6 months?
bad credit car loan
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bad credit car loan
the bank is obviously looking out for it’s interests and wanting you to keep your loan for longer so they can make more money off of you. However, realistically, paying off a $10,000 loan in 6 months is questionable for someone with a not so sparkly credit and income to match.
I think you should aim for a loan term of 9 months to 1 year rather than a loan term for 6 months.
bad credit car loan
If you listen to Dave Ramsey, you don’t need Yahoo Answers for this! Debt free is the ONLY way to live! Pay it off. Also, the only thing it will say on your credit report is paid in full as agreed, and that is ALL that matters!
bad credit car loan
In most cases, you probably have a simple interest loan which means of the first half you’ll pay about 70% in interest. If you want to build up your credit score, pay it out to a year. If you do not want to build your credit, then pay the $1500 to $3,000 per month until paid. The Bank does not want you to pay off early because they won’t make that much interest on the loan.