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Question By
Adanvjr

2 Contributions
37 People Helped
Should I pay off a loan early or keep a good re-payment history?
I recently pulled a personal loan to help build a credit history.

It's a $2500, 36-month loan with about 20% annual interest.
I often get year-end bonuses from my employer, based on how much we profited from the year prior. If all goes well, I would receive a big enough bonus to pay the loan.

My question is:
Should I pay off the loan early (almost 20 months early) and avoid paying interest?
Or should I pay the monthly payments to keep a good re-payment record?

I've checked with the bank and asked if paying off my loan early would penalize me (it was one of my main questions). They've informed that it does not (verbally and formally).

My main goal is to improve my credit history and credit scores.
I'm at 650, but I want to get to at least 700.

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Top Contributor
1884 Contributions
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Most Helpful Response

I would suggest opening a new account.

Helpful to 1 out of 1 people

by paying off the loan, you will lose available credit. 

There are plenty of 0% interest credit cards available that you should be able to get.  After securing a new card or 2 then go ahead and pay off that loan and save the interest. 

Good Luck

Reply by
Adanvjr

2 Contributions
37 People Helped
Helpful to 0 out of 1 people

That makes sense.  I'll be looking around.  Thanks for the help.

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