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leah123

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Paying off a secured loan
I have a secured loan though a CD the loan was taken out in 2012 for 7,562 I now owe 4,500 on the loan. Every yr I renew the loan for a $60 fee and they pull my credit through Euqifax dropping my score 3 pts each yr. If I pay the loan off using the CD will it effect my credit score negative way by paying it off too fast? Another issue according to Credit Karma my score is 676 and according to bank it's 620. I do have the income to save money so should I pay this off or would it be payed off too fast and my credit go down?

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You will have to contact your lender and ask if there is a penalty for early pay-off or a discount for early pay-off. Either way you got to factor in the $60 yearly fee as well as the yearly inquiry. Paying a loan off and closing it will decrease your credit score, yes I said decrease. If you need a boost in your score it may me wiser to pay the loan down, but not off. I am not sure how much your score would drop exactly (by paying the loan off) but I just read a post the other night where someone paid off their auto loan (being responsible) and took a significant hit to their credit score.

However, if there is a big reward (significant discount) for paying off early, it still may be something to consider.

Hopefully someone will come along with some better advice for you.

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