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Posted in Paying Your Bills
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Question By
knight8431

2 Contributions
2 People Helped
Payoff or pay down installment loan

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Top Contributor
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If you have the ability to pay off the installment loan, first ask yourself this question.   Why am I paying interest?   If you are using this loan to help build your credit, then you will want to pay it down so that the current loan amount is less then the original loan amount.  Your credit is computed based upon the percent due compared to the original amount.   When the loan is paid off fully, you will see a decrease in your score.   It will be removed from your average age of accounts and it would be one lesss type of credit account you have as well as it won't be a current credit account.  Your credit score is based on current credit accounts only.    If your score is suffient (above 740) and it was mine, I would pay it off so that I wasn't paying the interest and save that money for my other credit accounts.

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