If I want to build credit, how long should I keep a car loan?

"I have about a 60% down payment for a car, but I should have the cash to pay off the rest of the loan within a year. How long should I keep the car loan?"

Answer provided by
Eric Schad
Answered on Jul 27, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
“If you have money to pay off the loan but want to build your credit, holding it for 12 to 24 months is ideal. By doing so, you won’t accrue much interest but you will still build credit.
That doesn’t mean you have to get a 12- or 24-month loan, however. You can bring your monthly payments down with a 36- or 48-month loan.
The trade-off is that you might pay a tiny bit more in interest, but it’s entirely up to you and your preferences.”

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