by "Wobbles the Mind" (wobblesthemind)
Published 03/30/2017 at 10:42
by "Wobbles the Mind" (wobblesthemind)
Published 03/30/2017 at 10:42
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STARS: 4
I dont care if you end up with a tiny $10,000 loan for 7 years with 0% interest after putting 50% down, pay your loans off as fast as possible. House, car, school, business, whatever! Nothing is faster than cash money but I know things come up. Just focus on the pay off and increasing your discretionary income. Want to live well off? It doesnt matter if you make $20,000 or $200,000 a year if you still end up with every penny having a place it needs to go towards.
"Matt Nichelson" (whoismatt)
03/30/2017 at 10:47, STARS: 4
Though that is good in theory, that could actually harm you when it comes time to get another loan. Paying loans off early does nothing to help your credit and, at least with where I work, not having at least 3 active trade lines will have a negative effect on ability to get a loan.
Basically, the only way to have a good credit score and keep it is to stay in some amount of debt. It doesn’t have to a huge amount, just a small bslance month to month. If you make enough to not worry about how your credit looks, then that’s great. Not everybody has that luxury, unfortunately.
"EL_ULY" (uly)
03/30/2017 at 10:48, STARS: 1
Yeah ok. Easy. No problem. I’ll do it tomorrow :]
"404 - User No Longer Available" (toni-cipriani)
03/30/2017 at 10:48, STARS: 7
I was actually thinking about this.
My mortgage is 5-years at 2.97%, but if my investments are returning 6-7%, doesn’t seem to make that much sense to make prepayments to pay off ASAP. I’m still ahead leaving that loan alone, so it really depends, and you have to do your math.
"DC3 LS, will be perpetually replacing cars until the end of time" (dc3ls-)
03/30/2017 at 10:50, STARS: 0
No more cookies for you, until it’s payed off!
"Azrek" (azrek)
03/30/2017 at 10:51, STARS: 1
Is this another “journalism LoLz?”?
"crowmolly" (crowmolly)
03/30/2017 at 10:52, STARS: 3
Bingo.
Pay it off only if it makes financial sense. Back when mortgage rates were high you heard about paying them off early. Now? No way. Just don’t spend your saved money on horseshit.
"Mercedes Streeter" (smart)
03/30/2017 at 10:52, STARS: 0
I wish I could do all that. :(
I’m underwater in debt, most of it not even my fault. I owe like $60k in student loans from a school that scammed me (and I didn’t even get a degree out of it), two bankruptcies on my record (neither of them even mine, one from when was like 8 years old) and multiple companies and banks threatening to sue them for thousands of dollars my parents took out in my name and (of course!) never paid.
I wish I could like sue my parents or something, but I can never do that without bringing a world of hurt unto myself.
/And this concludes my Thursday rant.
"404 - User No Longer Available" (toni-cipriani)
03/30/2017 at 10:56, STARS: 4
...but this is Oppo, where you roam Craigslist to buy some rust buckets.
"haveacarortwoorthree2" (haveacarortwoorthree2)
03/30/2017 at 10:56, STARS: 0
Makes sense for you not to pay it off, particularly given that you only have 5 years left.
"Aaron M - MasoFiST" (amarks563)
03/30/2017 at 10:56, STARS: 1
My decision to pay off my car in one year instead of the full term means I’m down 8-10k that could have gone to my house down payment in exchange for saving about $600 in interest. In retrospect it was not the best financial decision.
"404 - User No Longer Available" (toni-cipriani)
03/30/2017 at 10:57, STARS: 0
That’s the interest term, actually, I’m still like 26 years off lol. Canadian mortgages work a bit differently.
"Mercedes Streeter" (smart)
03/30/2017 at 10:58, STARS: 1
...not having at least 3 active trade lines will have a negative effect on ability to get a loan.
This is also sadly correct. A lot of lenders take a look at your history and current open accounts. If your amount of open accounts has too little value or there are too little open accounts period, they see that as bad.
If you pay everything off early, they also see that as bad (sometimes). This is why people with bad credit can often continue to get deeper into debt than they already are...Our entire credit system is completely nonsensical.
"PartyPooper2012" (PartyPooper2012)
03/30/2017 at 11:05, STARS: 0
You already have investment paying 6+%. If you pay off your loan as fast as you can, you can then invest more money into your original investment...
~6.5%-2.97% = 3.53% vs 6.5%
"Dr. Zoidberg - RIP Oppo" (thetomselleck)
03/30/2017 at 11:06, STARS: 0
I take offense to that
"Arrivederci" (arrividerci)
03/30/2017 at 11:06, STARS: 0
You should be able to get those bankruptcies vacated out. You should start by requesting a copy of your credit report and then writing actual letters to each of the credit agencies.
"Matt Nichelson" (whoismatt)
03/30/2017 at 11:06, STARS: 1
It really is an absolute mess. Working in banking (though credit unions like the one I work at tend to be more helpful) has shown me just how bad it really is.
"Dr. Zoidberg - RIP Oppo" (thetomselleck)
03/30/2017 at 11:08, STARS: 0
I’m going to go out on a limb and guess you have neither student debt nor mortgage.
"404 - User No Longer Available" (toni-cipriani)
03/30/2017 at 11:14, STARS: 0
Except in this case the said 2.97% is still 30 years from being paid off, and plus it’s 3.53% vs 6.5, since your principal after paying off is significantly smaller, more like 0...
"jariten1781" (jariten1781)
03/30/2017 at 11:19, STARS: 0
I see this all the time, but can’t square it with my situation. My credit score is well into the 800s (as is my wife’s). I have one mortgage and have never had any other loan for longer than a year (every one paid off drastically early). My wife has never had a loan ever. Does the way we manage our revolving debt just counter balance the ‘always have a loan and don’t pay it off early’ advice? We both have ~3 credit cards apiece (combined limit >500k, combined balance never exceeds 5k, usually is much lower, and never floats over months).
Obviously it doesn’t really matter in practice since I don’t really do loans and when I have shopped them for shits and giggles I always qualify for the best rates anyhow, but I get antsy when I don’t understand things and my position doesn’t align with the advice given by people who obviously know more than I do about the process.
"Mercedes Streeter" (smart)
03/30/2017 at 11:28, STARS: 0
Oh, I’ve done that every 6 months every year since I’ve turned 18. For whatever reason, my social security number is an “alias” (or so the credit bureaus say) to my dad’s identity. So when he files for bankruptcy, I’m filing for bankruptcy. If he doesn’t pay his bills, I’m not paying my bills. And that’s ignoring the several times in life they legitimately did use my social to not pay for things.
The one from when I was 8 aged out. I can’t get that one to permanently go away though. As with everything on my credit report, the credit agencies simply say “well if you didn’t actually do _____ in the year of ____, you better sue your parents, because otherwise ¯\_()_/¯”.
"Matt Nichelson" (whoismatt)
03/30/2017 at 11:43, STARS: 0
Absolutely. Since you both have credit cards that maintain a balance, you both have debt that is listed each month that is paid in a timely manner. I probably should have clarified to include mentioning credit card balances playing a factor.
"EL_ULY" (uly)
03/30/2017 at 11:45, STARS: 0
MAMADAS!!!!!
(don’t Google that at work)
"DC3 LS, will be perpetually replacing cars until the end of time" (dc3ls-)
03/30/2017 at 11:50, STARS: 0
Que?
"jariten1781" (jariten1781)
03/30/2017 at 11:52, STARS: 0
Interesting, so why do all the articles always recommend carrying small loans with a balance as the ‘improve credit’ method de jour rather than just running a CC or two. The way I figure it, they’re always mini-0% interest loans whereas with small car/personal loans you aren’t getting the near-0% interest terms unless your credit is already decent anyway. Are they just worried that advice would end up with people not being disciplined and rolling their balance over months?
"fintail" (fintail)
03/30/2017 at 11:56, STARS: 0
Pay off a 7 year 0% loan asap? I assume you don’t work in finance. One can easily get 5%+ out of this market, much better idea to invest the difference. Pay off high interest credit cards asap, sure, but beyond that, not so simple.
"Matt Nichelson" (whoismatt)
03/30/2017 at 12:10, STARS: 0
It’s not necessarily bad information, but rather just not clear enough.
Carrying a small loan isn’t bad. We do small loans all the time for people wanting to build on their credit or establish credit. The way I explain it to members is, for example, having a small unsecured loan, a credit card, and a car loan. There’s your 3 trade lines that will keep a good credit score if all are paid on time. Keeping a rolling balance within reason on your credit card will not harm you. Having a maxed out card every month will. That much is obvious.
Credit is such a pain to get and sometimes a pain to keep up. I’ve seen people who had great scores years ago have a garbage score now because they had no active trade lines for the past 2-3 years. At that point it is just like starting over from scratch. The whole system needs an overhaul imo.
"EL_ULY" (uly)
03/30/2017 at 12:16, STARS: 1
LOL Google Translate :]
It’s a both like a “Fuck that!” or “Hell no” situation or a thing compared to “that sucks” or “that’s sucky”
"E92M3" (E46M3)
03/30/2017 at 12:48, STARS: 0
It makes no sense to prepay a 0% loan.
Here’s my dilemma though. My mortgage is at 4% APR. The stock market has been doing quite well for the last 8 years. Even though the overall market grew double digits last year the average investor only got a 5% return. Will it continue to do well in 2017? Or will it have a correction? Stocks are over valued according to experts. Do I take the guaranteed 4% return, or most likely risk losing money in the market. Or do I park my extra money it in a crappy 1% savings account, and buy mutual funds at a discount when there is a significant correction?
"fintail" (fintail)
03/30/2017 at 18:46, STARS: 0
For 4% vs 5%, I would pay off the mortgage - 1% isn’t a big deal when it is risk free, and the peace of mind of paying off a mortgage is priceless.
Nothing is without risk though, and many investments can be over valued even real estate. I don’t know if the current gang in control can keep the bubble of the prior gangf going in several areas (maybe not yours).
"E92M3" (E46M3)
03/30/2017 at 19:59, STARS: 0
I think that’s my plan. Fund my Roth, and pay extra on the mortgage until there’s a correction.
"MontegoMan562 is a Capri RS Owner" (montegoman562)
03/31/2017 at 13:53, STARS: 0
we just paid off a pile of credit card debt (holy shit was that free-ing). I have absolutely no interest in paying my mortgage down. I’m 2.5 years into it and if I put it up on the market right now, thanks to my down payment, I would be at a 60k profit minimum on the house (not taking into account the less realtor/taxes/fees etc of the sale). So we’ve got that, some still on the Jeep, but that’s going to be paid off in next year and my wife’s student loans. We have no intention of moving from this house unless there’s a drastic un-foreseen life change, no reason to apply more to mortgage.