Author Topic: Pay off a HIGH interest loan, or use it to build credit?  (Read 2805 times)

ricky bobby

  • 5 O'Clock Shadow
  • *
  • Posts: 12
Pay off a HIGH interest loan, or use it to build credit?
« on: January 14, 2014, 05:59:08 PM »
I'm currently living in a new found excess created by my mustashian 180. My monthly expenses are at a minimum, except on small loan. This is a very high interest loan (22%)! I now have the cash on hand to pay the loan off.

During the years of spending every nickel that I made, I've also ruined my credit.

What's the thoughts on keeping this loan alive just to benefit my credit score? I know that the interest is eating my money, but I also know that I'm not able to build credit in many other ways.

Any suggestions?

seattlecyclone

  • Walrus Stache
  • *******
  • Posts: 6572
  • Age: 37
  • Location: Seattle, WA
    • My blog
Re: Pay off a HIGH interest loan, or use it to build credit?
« Reply #1 on: January 14, 2014, 06:22:48 PM »
Pay off the loan.

Frankies Girl

  • Magnum Stache
  • ******
  • Posts: 3759
  • Age: 84
  • Location: The oubliette.
  • Ghouls Just Wanna Have Funds!
Re: Pay off a HIGH interest loan, or use it to build credit?
« Reply #2 on: January 14, 2014, 06:23:48 PM »
Pay off the loan.

Thegoblinchief

  • Guest
Re: Pay off a HIGH interest loan, or use it to build credit?
« Reply #3 on: January 14, 2014, 06:29:10 PM »
Pay off the loan!!!!

kendallf

  • Handlebar Stache
  • *****
  • Posts: 1068
  • Age: 55
  • Location: Jacksonville, FL
Re: Pay off a HIGH interest loan, or use it to build credit?
« Reply #4 on: January 14, 2014, 08:22:16 PM »
Pay off the loan, then start rebuilding your credit as if you were starting from scratch (which you are, right?).  Find out if your bank/credit union offers a secured credit card; get one and use it regularly for nominal amounts, pay it off in full each month.  Work up from there.  Your goal should be to not pay interest again, ever.. let alone ruinous interest rates like 22%!

oldladystache

  • Pencil Stache
  • ****
  • Posts: 812
  • Age: 77
  • Location: coastal southern california
Re: Pay off a HIGH interest loan, or use it to build credit?
« Reply #5 on: January 14, 2014, 08:26:26 PM »
Pay it off.

If you have a credit card use it and pay it off every month. If you don't have one try to get one. They may only offer you one with a very high interest rate but that's OK because you promise to pay it off every month and never need to pay interest.

Home Stretch

  • Stubble
  • **
  • Posts: 158
  • Age: 34
Re: Pay off a HIGH interest loan, or use it to build credit?
« Reply #6 on: January 14, 2014, 09:04:27 PM »
Pay the loan!