How long to pay off the auto loan?

[puppykitten]

Hi, i just got a new car with $15000 down payment and $7000 loan. I checked and found my credit score is about 756, but they still give me a very high APR of 7.5% for 60 month. Actually I can pay off the debt in about 3 months, and that is waht I am planning to do. But I am worrying although this may save me interest, but it may not contribute to my credit history, and may cost a lot if I want to buy a bouse later. I have been paid all my balance of credit cards at the end of the month, and didn't really borrow any money. Is there any way to both save interest paid and accumulate a better credit history? Thanks a lot!

 

[Viper GTS]

7.5%? Why the hell did you sign that?

Pay it off as quickly as you can, it will still benefit your credit.

7.5% is outrageous on a new car with your credit.

Viper GTS

 

[KLin]

if your credit score is 756, I doubt you're going to have any problem getting a good APR on a house, even if you pay your new vehicle off in 3 months.

 

[FrustratedUser]

Just pay it off if you can. It's not going to HURT your score and having 756 is very good.

 

[DAGTA]

Originally posted by: puppykitten
Hi, i just got a new car with $15000 down payment and $7000 loan. I checked and found my credit score is about 756, but they still give me a very high APR of 7.5% for 60 month. Actually I can pay off the debt in about 3 months, and that is waht I am planning to do. But I am worrying although this may save me interest, but it may not contribute to my credit history, and may cost a lot if I want to buy a bouse later. I have been paid all my balance of credit cards at the end of the month, and didn't really borrow any money. Is there any way to both save interest paid and accumulate a better credit history? Thanks a lot!

Haggle more next time. You've got a great credit score and could easily have gotten a much lower APR.

 

[FoBoT]

yeah, how much better can it get? 756 is good, right?

don't be greedy

pay off the loan and move on

 

[FrustratedUser]

If I could get 5.2% on a used car with only 6 months credit history you shuld have been able to pull something similar.

 

[Bryophyte]

http://www.bankrate.com/brm/auto-loan-calculator.asp
This is an awesome loan calculator. You can use it for any installment loan. You can generate amortization tables for your loan and for what would happen to your loan if you pay extra each month or year. Just FYI.

Also, make sure there are no early payoff penalties on your loan.

 

[Drizzy]

pay it off..

 

[JulesMaximus]

I'm curious, what kind of auto dealer ass-raped you on that interest rate? What kind of car? Y/M/M?

 

[kreb]

IIRC, paying it off won't save you any interest. This isn't a mortgage, it's a contract to pay equal amounts each month for 60 months. If you do pay it off early, you may have to pay a penalty..

 

[Drakkon]

what kinda dumbass buys a car with a 15K downpayment? and then takes out a loan for what i can only guess is an extra 6500 to pay off the extras, tax, title, license, and warrenty that the dealer puts into the "loans"? I dunno but that sounds like a helluva screw job, I would've just waited the 3 months, pay full cash, and gotten a much better deal from the dealer most likely than just take out a loan for loans sake. Or just bought a 15K car and not go with all the worry and probobly be just as happy.
Having a auto loan isnt bad, it might even increase ur credit score in the long run if u pay it off as normal, maybe even taking longer than 3 months, showing that u can make a payment each month is usually a good thing.

 

[Bryophyte]

Originally posted by: kreb


IIRC, paying it off won't save you any interest. This isn't a mortgage, it's a contract to pay equal amounts each month for 60 months. If you do pay it off early, you may have to pay a penalty..

No, most do not have a prepayment penalty, and they have to disclose it on the sales agreement. You are not normally obligated to pay interest that has not yet accrued.

 

[IHateMyJob2004]

Originally posted by: puppykitten
Hi, i just got a new car with $15000 down payment and $7000 loan. I checked and found my credit score is about 756, but they still give me a very high APR of 7.5% for 60 month. Actually I can pay off the debt in about 3 months, and that is waht I am planning to do. But I am worrying although this may save me interest, but it may not contribute to my credit history, and may cost a lot if I want to buy a bouse later. I have been paid all my balance of credit cards at the end of the month, and didn't really borrow any money. Is there any way to both save interest paid and accumulate a better credit history? Thanks a lot!

As long as you pay bills on time, you will be able to buy a house. I hate this myth that you need credit cards to build solid credit. My first credit card came AFTER I bought my first house. AFTER! Just pay your bills and you'll do fine (minimum payments atleast).

 

[RossMAN]

Originally posted by: Viper GTS
7.5%? Why the hell did you sign that?

Pay it off as quickly as you can, it will still benefit your credit.

7.5% is outrageous on a new car with your credit.

Viper GTS

Agreed.

Pay it off in 3 months if you can, 7.50% is outrageous.

Even with my high debt, pathetic income and low credit score of 634 I still managed to get 3.99% with my local Credit Union.

 

[Sundog]

Pay it off......no sense in paying interest on an object that is losing value, not gaining it.

 

[RossMAN]

Originally posted by: Sundog
Pay it off......no sense in paying interest on an object that is losing value, not gaining it.

Well said.