Let’s talk about the logistics of paying for large purchases. As in: When should I get a loan? And how big should that loan be? Should you ever forego a down payment or paying with cash even when you can afford it?
Unlike the suitcase full of dirty laundry you brought home from that conference three whole weeks ago… let’s unpack this! And our favorite way to unpack a problem is with a real-live question from a real-live reader with a real-live dilemma:
Hello sage bitches. My trusty old car is on its way out, and I’m going to need to get a new one soon. I do have enough money in savings to buy it outright without a loan (though it would put a… substantial dent in those savings), but some family members keep saying it might be a better idea to see if I can get a low-interest loan instead, because it “would be good to have paid off a big loan.” I do have a credit score of ~800, so it’s possible that I could get a decent loan, and I have heard a lot of vague things about how it’s good for your credit to have payed off a big purchase before, but something in me hates the idea of having to pay a higher total sum than I have to. Any advice?
An anonymous yet glorious citizen of Bitch Nation we’ll call Chickadee
In other words: “Should I get a loan just to improve my credit score even if I can afford to pay cash?”
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