What Is A Good Credit Score For Car Loan – Is Paying Off My Car Loan Early a Good Idea? – Part 1 – Credit 101 | Credit Karma
What Is A Good Credit Score For Car Loan – How To Choose The Right One
Paying off your car loan early could help you save on interest and free up some cash, but it may not make sense for you. In this video, we’ll look at one example of the potential impact of paying off a car loan early if you have good credit. If you have good credit, here are some things to consider before you decide to pay off your car loan:
– If you have a low interest rate on your auto loan, it may make more sense to put extra money toward paying down debt with a higher interest rate or building an emergency fund.
– Keeping your auto loan open could actually help your credit scores by adding positive payment history to your credit report.
– A closed auto loan that was in good standing and with a history of on-time payments will stay on your credit reports for up to 10 years. But a closed account won’t affect your credit scores as much as an open account.
– Potential lenders like to see a mix of accounts. Auto loans are installment accounts, while credit cards are often revolving accounts. If the auto loan is your only installment account on your credit reports, closing it could affect the mix of account types on your credit reports.
– While paying off your car loan early may not increase your credit scores if you already have good credit, paying off an auto loan could be the right move in some situations. Check out part 2 of this video series to learn more: hhttps://youtu.be/RUi5ObQy6GY
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Paying off your car loan early: Should you do it?
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