1. Take out loan 2. put in account 3. pay back loan with banks $$

867
10
Joined Jul 1, 2004
anyone ever take out a loan...
put it in a CD...or savings account...
then pay that bank back with its own $$$?

i heard it raises ur credit score so im thinkin about
helping myself out some...
 
24,861
5,553
Joined Jul 11, 2006
... i wouldn't...

i'm $85,000+ in debt though, so maybe i'm not the one to talk about this.
 
162
10
Joined Mar 19, 2005
I am sure those interest rates on the loans would be more than the money you'd make from the CD. Unless you put a lot of money initially into the CD youdon't make much.
 
5,178
10
Joined Jun 11, 2008
Originally Posted by Nako XL

... i wouldn't...

i'm $85,000+ in debt though, so maybe i'm not the one to talk about this.

got damn....i'm guessing because of college?
 
60
10
Joined Jan 28, 2006
Wouldnt the interest on the savings acct. have to be more than the interest on the loan for you to pay it back without taking money out your own pocket?
 
242
10
Joined Mar 3, 2009
The only way I see that working is if you put the money in stocks and you better hope those stocks do well!
 
867
10
Joined Jul 1, 2004
of coarse i'd be losing $$$... the cd would count act the loan interest...
but whatever...
the point is... i'd have a loan paid back on my credit report...
and i didnt even really use it...
 
58,079
33,796
Joined Dec 13, 2004
It will only work if the loan is interest free for the time your money is in a CD.
Otherwise, the interest on the loan will definitely be a lot higher than the CD's interest.

Plus if you really think about it, with the 2%-3% interest you earn, is it really worth it?
$200-$300 a year for a $10,000 loan, that is only $16-$25 a month and you also get taxed on it.
And there's a chance that you may screw up and mess up your credit.
 
10,723
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Joined Feb 12, 2008
you don't get enough back from a CD to make that pay off...at least i highly doubt it.
 
3,108
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Joined May 4, 2008
Ultimately, the ends wouldn't justify the means.

The fact that we are supposedly in a "phantom" bull market right now only complicates matters should you open it sometime soon.

In addition, just looking at other things our parents had financially that we won't have decades from now like Social Security, and this wouldn't bethe smartest financial move in the world.

Just invest in solid materials like gold, iron, aluminum, et. al to help stabilize your portfolio and work on paying off your debts the old fashion way.

Since we're in a recession, literally everything and anything is negotiable.
 
2,120
341
Joined Jan 17, 2008
Ask Clark Howard...

Really though, I have asked a loan agent about this before and she said that it only works if you slowly pay off the loan over a period of time. Once you makea certain amount of payments, they start to report good credit. If you take the money right back and pay it off, it wont work.
 
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