"What is the best way to prepay my car loan? "

"I recently came into some cash and can now afford to pay off my car loan in full. If I put this money towards the car loan, I will end up saving about $4k in interest payments. I am wondering if it would be wise to pay in full and just be done with it or if I should leave a small balance to reduce my monthly payments and keep building my credit score?"

“This is a matter of preference and is completely dependent on what you want to accomplish. If you want to own your car outright so you can sell it anytime you want, then go ahead and pay the car off. The dip in your credit won’t be big enough to affect your ability to get financing for another car.
If you are simply trying to reduce your monthly outflow, then either way should work. Personally, I think I would just pay the whole thing off and save as much money as possible.”
Johnny Puckett
Answered on Jul 26, 2021
Johnny Puckett is a freelance writer and automotive expert. He has contributed content to a number of some of the largest online publications, aftermarket automotive manufacturers’ sites, and automotive informational sites. His experience in the automotive and information fields informs his writing at Jerry. His automotive interests bleed into his free time, where he enjoys modifying his favorite cars and woodworking.

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