Does paying off a car loan within a couple of months raise your credit score?
However, it is (sometimes) possible to reap monetary benefits. Most installment loans are fixed rate loans. You borrow $X at X% and will pay back the full amount regardless of when you pay. But, if you happen to obtain a compounding interest installment loan (similar to a mortgage loan), there may be significant savings in paying off early. So, while this wouldn’t help your credit score in any way, it might save you some $, if you have that specific type of loan. You should be able to find out by reading your loan documents or calling your lender. You may also have a pre-payment penalty. That’s another good reason to read your loan docs thoroughly.
