Does paying off a loan early hurt credit?

+1 vote
asked Dec 31, 2018 in Credit by missmargaret (200 points)
Does paying off a loan early hurt credit?

1 Answer

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answered Jan 1 by Essmann (24,240 points)
If you decide to pay off your loan early then it will not hurt your credit in any way.

Paying off your loan early will show that you're responsible with the loans and credit and may actually boost your credit score.

However if you want to continue to raise your credit score then it's better to keep the loan open for the full loan term as the longer you have the loan open and continue to make the loan payments it will continue to boost your credit score and credit rating.

You may also have to pay an early payoff fee for the loan since the loan company makes it's money through the interest charged over the full term of the loan.

However if you want too you may pay off the loan at anytime in full if you want too but just be aware of that early loan payoff fee but it's still usually cheaper than the full interest charged for the loan but sometimes it may be the same amount.

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