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Should I pay off my auto loan?

Bogleheads • View forum - Personal Finance (Not Investing) - www.bogleheads.org
I bought a car and took out an auto loan for part of it (did not really need to take out the auto loan).

My rationale for taking out a loan when I could have paid straight cash is because sooner or latter I will want to take out a mortgage and at the current moment I have ZERO loan history.

I make a good income for a single person (over 100k), have paid my credit cards off in full every single time before the "due date", and pay all my bills on time. Just worried when I ask for a mortgage (in my current area the mortgage will be between 300-600k or so) I will get a "bad" rate since I have no history of owing any significant amount of money.

But then I found I HATE paying interest when I have the $$$ in my pocket. With the current auto loan (started as 24 months) I quickly paid it down so if I pay and monthly payment the rest of the term (22 months) it will be a nominal amount ($100 a month).

Would it make much difference with my credit score/rate on future mortgage if I

a.) Pay off the remaining amount (lets just say 2k) tomorrow

or

b.) Pay $100 a month for the next 22 months.

Note

Insurance is NOT a concern in this case (ie I would have full coverage whether I had the auto loan or the car was paid off for at least the first 2 years).
Date: Jan 30, 2014   


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