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Posted in Auto Loans
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Lin153

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Will it hurt my credit if I finance a car and pay it off sooner?
Is it better to go the entire term? I'm sure it will look better for long repayment history but will it necessarily harm my credit at all if I pay it off within 8-12 months rather than 36-48 months?

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You'll be saving on interest. Anytime you pay interest, it's wasted money. Just be sure there's no pre-payment clause in the loan documents.  Also be aware your credit score may drop when the loan is paid off, because there is no longer a loan where payments are being made.

I would recommend a credit card or two down the road to bolster your credit rating. Never charge more than 10% of the limit, and only charge what you can pay off monthly so you're not paying interest. 

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