I need some advice regarding Personal Loans

OK... here comes my history:

Some of you know my history posted previously. Well... I have a car loan. I still owe $10500. I asked my current bank (where I have some money saved and a credit card) for what I'm pre-approved.

It's Citibank.

They do not offer car loans, but they told me I'm pre-approved for a $9000 personal load. With that and some money on my savings, i will be able to pay off the car and then, pay the personal loan instead.

For creditors, what is the best choice to do? Close the loan and open the personal loan, or just keep with the car loan (the APR is the same for both)


Also, I'm approved for a $2500 line of credit. That is credit you can use for overdraft protection and/or to withdraw money. I really do not need this account, but it might be good for building credit history. Should I open it? It's free and you do not need to use it... it's like just a backup.


Thanks a lot!!

If the $9,000 loan is at a fixed interest rate and you will be paying the same amount of time, or less, on this loan it's a good way to go. Here's why:

Whenever you pay off a large debt, such as a car loan, your credit score will go up.

However, don't screw yourself by paying more in interest by stretching the loan payments out longer than the car loan. If the $9,000 loan is for longer than the car loan then just continue paying on the car loan.

As for the line of credit, it's good to have, but you want to watch out about using it. Make sure the interest rate isn't too high. Companies like CitiBank are good about giving you an introductory interest rate and then jacking it way up.

However, if you have a line of credit and you don't use it (or keep it under 30%) future lenders will like that. It shows you know how to manage money and not max out your credit.