Should I pay off a loan early if it's at 2.59% for 60 months?

"I want to build credit while also buying a new car. I found a car I like for $20,000, and I got approved for a 2.59% loan for 60 months.

I have the cash on hand to buy the car, but I thought I could keep this money and invest it while I pay the loan. Is this a good move? Or should I pay the loan off early?"

Answer provided by
Eric Schad
Answered on Jun 03, 2021
“You seem to have the right idea. With that low of an interest rate, you should probably hold on to the $20,000 and invest it in something else.
As long as you can make more than 2.59% on your investment, you’re coming out ahead. So make a smart move with the $20,000 and pay the loan off as you normally would.
If you need to lower your debt for another reason (such as a home purchase), you can always pay off the loan in advance.”

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