Refinancing/Paying off vehicle

[mustangguy289]

How long should you wait before refinancing or paying off a vehicle?

We were told if you do these too soon that banks will put a "did not meet terms" on your credit if you payoff the loan too soon.

[Cooter]

who told you that?

[sc281]

How long should you wait before refinancing or paying off a vehicle?

We were told if you do these two soon that banks will put a "did not meet terms" on your credit if you payoff the loan too soon.

And you believed them?

[mustangguy289]

a dealership financing guy... which is why im curious if it is true. I want to refinance my wife's car. If I do it before 12 months, State Farm Bank (the lender) will charge me a $100 fee.

The savings on interest will be much better than this $100 so I am not too worried about it. The payment will be pretty much the same ($10 cheaper) but the term will be reduced by 12 months and it will save us close to 2000 over the life of the loan ( if we made minimum payments ).

** The advantage of State Farm was that it was extremely simple and gave free Gap insurance. However, we owe much less that the value of the vehicle due to trade in and down payment. We bought the car back in August and both of our credit scores have increased by about 50-60 points since then.

[sc281]

No minimum. The Finance guy just doesn't get paid if there isn't a first payment on the note.

Depends if you like your finance guy or not.

[mustangguy289]

No minimum. The Finance guy just doesn't get paid if there isn't a first payment on the note.

Depends if you like your finance guy or not.

The finance guy that told me this was a good guy and was doing the financing on my truck which I do not plan to refinance as the little bit of savings would not be worth it. He got us a great rate for it being a 2007.

But that makes sense now why he told us that. He also said that because I sold my previous truck and paid it off it might hurt my credit a little bit. We made 6 payments on time, all above the minimum payment, and then paid it off. How would that hurt me?

[sc281]

The finance guy that told me this was a good guy and was doing the financing on my truck which I do not plan to refinance as the little bit of savings would not be worth it. He got us a great rate for it being a 2007.

But that makes sense now why he told us that. He also said that because I sold my previous truck and paid it off it might hurt my credit a little bit. We made 6 payments on time, all above the minimum payment, and then paid it off. How would that hurt me?

That new tradeline lowered your average age of accounts. No biggie, though. Never worry about paying off a loan too early.

[Texican]

I've personally heard this on a car loan and a credit loan, I was told that you should keep it open for at least a year to build better credit. Obviously you would be saving money to pay it off earlier but in my case I need the longer revolving credit history to increase my score.

[mustangguy289]

I've personally heard this on a car loan and a credit loan, I was told that you should keep it open for at least a year to build better credit. Obviously you would be saving money to pay it off earlier but in my case I need the longer revolving credit history to increase my score.

Score is very important to us as we plan to get into our first house in about 2 yrs. I think I might just wait until August to refinance.

[Texican]

That's pretty much what I did with our old Expedition, it was a cheap enough payment to not bother me too much and when it came time to buy our house I paid it off to have a better debt to income ratio.