Services
Insurance
Loans
Repairs
Advice
About

What if I pay off my car loan early?

What will happen to my credit if I pay off my car loan early? I have a good mix of different credit accounts—a mortgage, student loans, and two credit cards. I want to limit the number of active accounts I have to manage, so I’m considering paying off my car loan to not worry about it.

avatar
Phoebe Mah · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
You are smart to limit the number of accounts you have to manage. Since you are wondering what will happen to your credit if you pay off your car loan early, don’t worry. In your situation, your
credit
won’t suffer from closing the loan account.
It’s true that maintaining a variety of credit accounts helps build your credit mix, which in turn, can help improve your credit score. That said, having too many open lines of credit can cause financial problems, like putting yourself at risk to get deeper into debt.
If you already have a long-term credit history with various credit accounts, there is no harm in paying off your loan. But be mindful when you close your loan account, this will temporarily knock off a few points from your credit score. It will likely bounce back quickly, though.
Since you are managing different credit accounts, check out affordable car insurance options with
Jerry
to help cut back on your expenses. Once you download the Jerry app, just answer a handful of questions that will take you roughly 45 seconds to complete and you’ll immediately get car insurance quotes for coverage similar to your current plan.
Jerry customers save an average of $879 a year.
View full answer 
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

Easiest way to compare and buy car insurance

√
No long forms
√
No spam or unwanted phone calls
√
Quotes from top insurance companies
Find insurance savings