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csantino96

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Should I pay off an motorcycle loan in full to avoid interest, or get a secured loan?
I'm 19 years old, and have been paying off a motorcycle for almost 2 years now. Since I am so new to having credit, my interest rate for the bike was close to 14% which is just killing me. I've already been denied a regular loan for the remaining 3400 dollars. I have over 4 grand saved up but I'm really interested in building my credit. Would it be better to take out a secured loan, or to just pay the bike off? Any info would be greatly apprieciated! Thanks fellow creditkarma members.

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There is no reason you can't do both, if you chose to do so. Pay 3.4k loan off and use rest of savings (1k?) to open a secured loan......

Since you already have a loan for two years? You might not need a secured loan to build credit, assume there aren't any late payments nor other baddies on your report? You should able to get few credit cards without much of issues. Credit cards are quicker way to build your credit and once your loan is paid off? You score will most likely take a dip......

I don't know if it's even worth it to pay your loan off now, because with amortized loans? You pay bulk of interest during first 2/3 life of loan, and bulk of principle during last 1/3. You can roughly gauge that by the amount you still owe (3.4k?), your monthly payment times length of loan left. Of course, there are sites you can go that shows you the break down of interest/principle paid each month thru-out length of loan.

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Take out a Secured loan and pay off the bike with that. Just make sure that the secured loan that you get will be reported to all three credit bureaus. You should get a couple of credit cards as well even if they have to be secured too. Keep in mind that simply paying off the bike would cause harm to your credit as it would leave you with no active accounts, so I would not do that.

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