Build put off..

[handyjoe]

Originally Posted by Tibbett

I'll put stuff off and still be faster than you

No, you...but I...well if...DAMN IT.

*goes back into corner*

[TheWastedYears]

Originally Posted by bc3tech

Bad idea. here's why:

car depreciates every day, no matter if you drive it or not. throwing more money into a depreciating item is not financially sound.

And every day you have that loan, you're paying interest on something that's worth less.

Would you rather pay $18,000 for something that has no value? Or finance that figure, and end up paying $24,000?

Fire your banker.

[manticus]

Originally Posted by TheWastedYears

And every day you have that loan, you're paying interest on something that's worth less.

Would you rather pay $18,000 for something that has no value? Or finance that figure, and end up paying $24,000?

Fire your banker.

Agreed - fire that guy. Every dollar spent against a loan is making you the equivalent to the interest rate in savings every time. If you know an savings account that pays you more interest than your loan, then go right ahead. Otherwise, pay down the credit that charges the highest interest rate first.

(a banker)

[vandy0419]

Originally Posted by bc3tech

Bad idea. here's why:

car depreciates every day, no matter if you drive it or not. throwing more money into a depreciating item is not financially sound. better to take the extra money and put it away in a savings account and let interest accrue, then when you have enough money in there (with interest capitalized on it) to do so, pay off the entire car in a lump sum.
This was the advice given to me by a banker.

What are you talking about?! Paying off my car and dodging literally thousands in interest is a lot smarter. Interest on car loan > Interest earned on a certificate of deposit. Also, the earlier the car is paid off the earlier the account shows paid off and is one less installment account on my credit report which will leave my total debt lower increase my credit score even more. Then I could piss away as much as I want on car parts to build the car up or get a second car because with this one paid off it is straight up collateral for any personal loans or anything taken against a free and open car.

The bank I have doesn't use extra money paid towards unearned interest, it only goes to accrued interest. So all that extra money puts a hit in the principle. Also less monthly payments on my credit report opens up the DTI for a chance of getting a lot high of a mortgage loan in a year when I plan on buying a house.

The car has already matched the point at which the large drop in depreciation has already been met and from now on the depreciation slope will be rather steady.

[manticus]

Originally Posted by vandy0419

Also, the earlier the car is paid off the earlier the account shows paid off and is one less installment account on my credit report which will leave my total debt lower increase my credit score even more.

Banker on.

Actually, this is a little misleading - it is wise to pay off debt, but when you don't have a monthly payment on it, the effect on your credit score is neither good nor bad.

All credit is either R (revolving=credit card or line of credit) or I (instalment=loan). But along with that, is a number 0-9. This number is your rating and how well you pay it. Every payment you make, is a "1", every payment you miss that is less than 30 days, is a "2", etc.

So, your visa could look like this:

R1, R2 - 10/05, R3 - 08/03

That means, it's currently rated R1, but you missed one payment (less than 30 days) back in October of 2005, and you missed another payment (less than 60 days) back in August of 2003.

The problem with paying out credit is that it then has a "0" rating and no longer counts towards improving your credit score.

Regardless, it's always better to pay down high-interest credit anyhow - if your biggest worry is how you can pay your car down faster (and not how to skip a payment) then you're on the right track - your credit will just follow suit over time.

Banker off.

Ian