PriceProtect™
DriveShield™
GarageGuard™
Services
Insurance
Car Insurance
Compare Car Insurance with Jerry
Jerry’s Expert Advice
Car Insurance Estimates
Home & Renters Insurance
Renters Insurance
Loans
Car Loan
Compare Car Loans with Jerry
Jerry's Expert Advice
Car Loan Guides
Repairs
Car Repair Estimates
Repair Estimates for Popular Services
Advice
Read Car Content
Browse Jerry Car Advice
Check Out Expert Car QnA
Learn About How We Create Content
Jerry Data & Research
What happens when you pay off a car loan early?
I looked at my finances recently and realized I can afford to pay off my car loan. I still have about six months of payments left to make. It seems like a good idea, but I know finances can be weird. Should you pay off a car loan early?
Lauren Smith · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Congratulations, that must feel so exciting! However, you are correct in questioning what happens when you pay off a car loan early. There are pros and cons.
Pros include:
- Owning your car
- Saving on interest
- A better debt-to-income ratio
- That feeling of paying off a loan
Cons include:
- A dip in your credit score (usually this is temporary)
- Incurringprepayment penalties(check your loan agreement before paying it off to ensure it’s worth it)
Whenever there are changes in your car ownership journey, you should think about your car insurance. Changes like owning your car outright can give you a chance to rethink add-on coverages you may no longer need. Or it could just be a great time to look for savings.
You can save money on car insurance by using the
Jerry
app. We’ll compare quotes from the top 50+ insurers in minutes to help you find the best deals. And on average, our users save $879 a year. View full answer
- Gregory R.
WHY YOU CAN TRUST JERRY
Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
Join 4M+ members in lowering their car insurance
You Might Also Be Interested
Read Advice From Car Experts At Jerry
What Others Are Asking
Browse More Content
Insurance in Your State
Easiest way to compare and buy car insurance
No long forms
No spam or unwanted phone calls
Quotes from top insurance companies
