So my car got totaled last week (ugh, don't even ask, I'm fine tho). Anyway, insurance is gonna cover most of it, but I still owe some money on the loan. I'm debating whether to just pay off the remaining balance right now outta pocket and get it over with, or wait until insurance settles everything first. Anyone been through this before? Which way did you go and why?
I've never been in this exact situation (still learning to drive, actually), but wouldn't it depend on how long insurance usually takes to settle? Like if it's gonna drag out for weeks or months, maybe paying it off now gives you peace of mind. But then again, if insurance ends up covering more than you expect, could you end up overpaying or complicating things?
Also, does paying it off early affect your credit score positively or negatively? I heard somewhere that paying loans off early can sometimes ding your credit temporarily...not sure if that's true though.
Curious—did your insurance company give you any timeline or estimate yet? Seems like knowing that would make the decision easier.
Had something similar happen a few years back—my car got totaled, and I still owed a chunk on it. Insurance took about three weeks to settle, but honestly, waiting it out saved me from accidentally overpaying. Plus, paying off early didn't really boost my credit noticeably. Have you checked if your loan has any early payoff penalties? Mine didn't, but I've heard some lenders sneak those in...might be worth double-checking before you decide.
"Have you checked if your loan has any early payoff penalties? Mine didn't, but I've heard some lenders sneak those in...might be worth double-checking before you decide."
Good call on the sneaky early payoff penalties—those things are like hidden landmines in the fine print. Had a buddy who learned that lesson the hard way, and let's just say his wallet was not thrilled.
Honestly, I'd lean towards waiting it out too. Here's my foolproof method for handling this exact scenario (tested and perfected by yours truly):
Step 1: Panic briefly, then breathe deeply. (Optional but highly recommended.)
Step 2: Check your loan paperwork or call your lender to ask about penalties. Seriously, don't skip this step—it's like checking your blind spot before merging.
Step 3: Wait patiently for insurance to settle. Yes, patience is annoying, but rushing usually just leads to headaches. Plus, as mentioned, paying early doesn't really boost credit scores enough to justify the hassle.
Step 4: Once insurance pays out, then reassess your remaining balance. If there's still a chunk left over, that's when you decide if paying it off early makes sense financially.
When my sister totaled her car, she freaked out and tried to pay off the loan immediately. Luckily, the bank rep talked her down and explained she'd probably end up overpaying and waiting weeks to get reimbursed. She waited, insurance settled, and it turned out she owed way less than she thought. Crisis averted.
Also, minor disagreement here—while paying off early might not noticeably boost your credit score, it can still feel pretty darn satisfying psychologically. Like checking off a dreaded chore from your to-do list. But financially speaking, waiting is usually the smarter move.
Anyway, good luck navigating this mess—car stuff is always stressful. At least you're getting some solid advice here...and maybe a laugh or two.
Crisis averted.
Good points about checking for penalties and waiting for insurance to settle first. When my wife's SUV got totaled, we initially thought we'd just pay off the loan immediately to avoid interest piling up. But after talking to our lender, we realized it made more sense to wait. Insurance ended up covering almost everything, and we only had a small balance left. Definitely saved us some unnecessary stress and hassle.
