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Level 6

Payoff new loan early

I borrowed money from a lender only 2 months ago. I have money now to repay it in full. I have paid one payment. Will my credit points lower by paying this creditor now?
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Level 20

Payoff new loan early

If it does (and it probably won't) it would only be a few points. To that I would say "so what?". I for one am not willing to pay what could potentially be hundreds or even thousands of dollars in interest, just to save a few points on my credit score. Were I in your shoes, I'd pay it off and then keep making my monthly payments "TO ME!" so that in the future, either I pay for what I want in cash thus avoiding having to deal with a lender at all, or at least have enough to put down more than just a "minimum" down payment on something.

Not to far back we purchased a brand new car with an asking price of $24K. With $20K cash in my hand I gave the dealer/salesman a choice.... all of it right now at this very moment in time and call it a closed deal, or I walk and never come back. That's the 2nd time in my life we've done that. Both times they took the offer.

One advantage to having paid cash for a new car (in addition to paying less for the car) was that when it came to insurance, I didn't "need" full coverage. So insurance companies were more willing to "give" a bit on their rate. For us, it was win-win-win all the way around.

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4 Replies
Level 20

Payoff new loan early

If it does (and it probably won't) it would only be a few points. To that I would say "so what?". I for one am not willing to pay what could potentially be hundreds or even thousands of dollars in interest, just to save a few points on my credit score. Were I in your shoes, I'd pay it off and then keep making my monthly payments "TO ME!" so that in the future, either I pay for what I want in cash thus avoiding having to deal with a lender at all, or at least have enough to put down more than just a "minimum" down payment on something.

Not to far back we purchased a brand new car with an asking price of $24K. With $20K cash in my hand I gave the dealer/salesman a choice.... all of it right now at this very moment in time and call it a closed deal, or I walk and never come back. That's the 2nd time in my life we've done that. Both times they took the offer.

One advantage to having paid cash for a new car (in addition to paying less for the car) was that when it came to insurance, I didn't "need" full coverage. So insurance companies were more willing to "give" a bit on their rate. For us, it was win-win-win all the way around.

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Level 6

Payoff new loan early

Any time I have paid off loans early, my score went up. Regardless, a few points are worth the interest you are going to pay on the loan.
Level 20

Payoff new loan early

 I just had what I refer to as a "Homer Simpson moment" having realized I missed the key word "early". DOH!

Paying off a loan early will, without question not hurt one's credit score. In fact, more than 90% of the time it will actually improve it. It may only be by a few points, but so what? If you have the cash, pay it off. You will have hundreds (if not a few thousand) on interest payments.

 

Level 3

Payoff new loan early

I pd off a huge grensjy bill of 10900. It doesnt seem to be showing. That was in the beginning of the month of Nov. Shouldnt that bring up my score