Credit and buying a car

[ChIoVnIdCa]

Car is $14000
I would put $6000 down cash
I have a $2000 trade

Loan would be for $6000


I would pay $1500 a month and have it paid off in around four months.

Is it better to pay it off in a short time or should I pay $1500 a month till I get down to $2000 and pay the standard payment and extended it?
Main reason I am getting this loan is to get some more positive things on my credit report to get a home loan ,etc...

[Joey]

A lot of times it's advantageous to carry a balance on stuff, as long as you know you can pay it on time, consistently. If you don't mind taking a little while to pay it off, it would benefit your credit rating to show that you can handle payments over time. I'd pick a steady amount more than the minimum that you can fork over monthly, take it for eight months or a year.

That said don't decide to just do the minimum for like two years, then go and spread yourself too thin to the point minimum payments become a burden. Stuff happens, always have a buffer and be prepared.

What are you buying btw? Fit?

[owequitit]

Car is $14000
I would put $6000 down cash
I have a $2000 trade

Loan would be for $6000


I would pay $1500 a month and have it paid off in around four months.

Is it better to pay it off in a short time or should I pay $1500 a month till I get down to $2000 and pay the standard payment and extended it?
Main reason I am getting this loan is to get some more positive things on my credit report to get a home loan ,etc...

If you are looking to BUILD credit, I would recommend just making the normal payment for the duration of the loan. Paying it off early will save you some money, but the longer you make a structured payment, the better it will look on your credit, because it establishes a more long term history.

[4GAccordH22]

If you pay it off in less than six months, some places don't even report it to the credit bureaus. Best thing is to pay slightly more than the minimum on a closed end loan such as a car loan...

[verothacamaro]

Car is $14000
I would put $6000 down cash
I have a $2000 trade

Loan would be for $6000


I would pay $1500 a month and have it paid off in around four months.

Is it better to pay it off in a short time or should I pay $1500 a month till I get down to $2000 and pay the standard payment and extended it?
Main reason I am getting this loan is to get some more positive things on my credit report to get a home loan ,etc...

longer payments are a great way to show consistency.

all positive, but short payments might raise a flag.

[NutBucket]

I paid off a 5 year car loan in under 3 years and will pay another 3 year loan off in 1.5 years or so. I'd say pay it off over the course of a year at least.

[Fake Thug]

I say pay it off quick. Its a car. Cars are terrible investments . The less money spent,the better. Carry it to term and you might end up paying 25% or more back. When it come to something that depriciates like crackwhores and you decide go all the way then you might as well burn your money.Use your credit cards if you want to build credit.

[NutBucket]

Sorry, you're totally wrong on that one. Credit cards and car loans fall into two categories and they don't build your credit the same way. You cannot substitute one for the other.

[lil_dcb7]

Sorry, you're totally wrong on that one. Credit cards and car loans fall into two categories and they don't build your credit the same way. You cannot substitute one for the other.

I heard that an auto loan is one of the best ways to build up credit, fast.

[NutBucket]

Yes, I'd agree with that since it easiest "installment" loan to get.

The big difference between the two types...obviously.....is that a car loan has a set monthly payment, say $500. You must pay at least $500 every month. With a CC, you can either pay the minimum, $50, or the whole balance. Anyone can get revolving accounts. Its the installment accounts that really matter.

[Gemini]

car payments and mortgages are the best credit builders. Dont pay it off quicker than one year

[lil_dcb7]

car payments and mortgages are the best credit builders. Dont pay it off quicker than one year

six months at the very least.

[almostJDM]

X2 what everyone said about streching it out thats what im doing then once it gets to about 1500 ill pay it off my loan is only for 7000 minimum on mine is $182.75 i pay $250 a month

[Fake Thug]

Sorry, you're totally wrong on that one. Credit cards and car loans fall into two categories and they don't build your credit the same way. You cannot substitute one for the other.

Wrong on what? About a car being a bad investment? Wrong about building credit with cards or personal loans? Credit cards still build credit. Not the same as a car loan but You can still get a house or buisness loan if the only credit you have is through credit cards or personal loans. you can build credit saving money(which should be the main reason for building credit in the first place) or you can build credit waisting money.Either way lenders will know that you will see to your obligations.

[NutBucket]

Cars are a bad investment, yes. But why would you get a personal loan at 10%+ just to build credit? Seems to me a low rate car loan is just as good....assuming you're going to buy the car anyway! Besides, seems to me that the main reason people need personal loans are for vehicles, whether its a car, motorcycle, ATV, boat...you get the idea.

Nobody is saying that you MUST get a car loan for the sake of building credit. We're just discussing that its an excellent way to build credit and how to use a car loan...or any loan really, to maximize its positive effects on your credit.