(Closed) Should we pay it off early or wait?

posted 5 years ago in Money
  • poll: Low and slow or lump sums
    Low and slow : (3 votes)
    10 %
    lump sums : (28 votes)
    90 %
  • Post # 3
    Member
    5002 posts
    Bee Keeper
    • Wedding: September 2013

    I would get rid of any and all credit card debt ASAP!!!

    Post # 4
    Member
    2652 posts
    Sugar bee
    • Wedding: April 2014 - Italian Villa

    It depends on what kind of loan it is.

    Student loans- it doesn’t matter how much you owe as long as you pay on time.

    Other credit loans- The less you owe, the better!

    So, pay down credit cards, car loans, etc, first.

     

    I used to work for a mortgage broker.

    P.S. If you have any questions you can PM me

    Post # 5
    Member
    9917 posts
    Buzzing Beekeeper
    • Wedding: June 2013

    No debt is good debt!  I have an almost insurmountable amount of student loan debt, and my goal is to PAY IT OFF.  

    Post # 6
    Member
    43 posts
    Newbee
    • Wedding: September 2013

    When my fiances dad paid off his house/credit cards/vehicles in one lump sum after his company was bought out, his credit score went down, so I would take that into consideration too.  As long as you’re paying above minimum payments and you’re not behind I say pay it off within a few months.

    Post # 7
    Member
    790 posts
    Busy bee
    • Wedding: July 2012

    We’ve paid off debt in the order of the interest rates. Darling Husband had a couple of student loans at 6.8% so we paid those off asap in lump sums. Other, lower rate debt gets paid off in chunks as we go. It’s not terrible to carry some small amount of debt and pay it off regularly as a boost to your credit scores.

    Post # 9
    Member
    5662 posts
    Bee Keeper
    • Wedding: August 2012

    I’ve voted lump sums because no debt is good and having a high debt to credit ratio works against you. HOWEVER, the nest way to build your credit score us to make monthly payments on something. So you can either pay off all but one if the debts ando continue to make payments on one, or pay it all off and set up some regular bills like cell phones and utilities to do auto pay from a credit card, then pay it off every month. Whatever you do, don’t close any of those accounts if any of them are revolving Debt. Length of credit history is another big factor when calculating credit score. 

    Post # 10
    Member
    43 posts
    Newbee
    • Wedding: September 2013

    @MsJ2theZ:  Having a cell phone contract won’t help your credit score, but if you don’t pay it, and it get sent to collections it will have a negative impact on your score.

    Post # 11
    Member
    2954 posts
    Sugar bee
    • Wedding: February 1998

    I hate debt and would try to get rid of it as soon as possible

    Post # 12
    Member
    2440 posts
    Buzzing bee
    • Wedding: September 2013

    Lot’s of people tout low and slow. Sadly, they are ill informed. Basically, credit rating agencies only care about you paying off your debt. They don’t care how long you take to do it so long as you make a payment. Because of that, you are better off paying off  a big debt as soon as possible, in order to avoid paying as much in interest.

     

    If you want to carry credit in order to continue boosting your score, you would be better off employing the grocery method. Budget your groceries as you always do, make your purchases on your credit card, then pay off your card completely either immediately, or immediately before it would accrue interest. You don’t have to carry debt over from month to month in order to improve your score. Since you guys are doing that anyway, paying off your debt is an excellent next step.

     

    Here’s some helpful info you and your fi might want to look over.

     

    Credit Score overview:

    http://www.howstuffworks.com/personal-finance/debt-management/credit-score.htm

     

    How to raise your credit score

    http://www.howstuffworks.com/personal-finance/debt-management/improve-credit-score.htm

     

    In case you want some reassurance, my credit score is phenomenal. Seriously. Anytime I have to apply for something, people do a double take.

    Post # 13
    Member
    5662 posts
    Bee Keeper
    • Wedding: August 2012

    @tphotog:  I think you misunderstood. I said to pay some bills such as their cell phone bill with the credit card and pay the credit card bill to build Their score. 

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