I got my car (2020 Ford Fusion Hybrid SE) new 3 years ago at $25k for a 6 year loan @ 0% interest for entirety of loan, $350 a month payment. I’m about halfway paid off and have about $12.5k left on it. What should I do? I just get sick of paying $350 a month.
I’d bite the bullet and keep paying it, it looks good on your credit report to have secured credit with a long repayment history.
Paying off early and closing the account will drop that for a little while though. I just paid off a personal loan 4 months early and mine dropped by 21 points.
How are you checking your credit score? Frequent hard-pulls of your actual credit score would show up on your credit report and actually lower your credit score on it’s own.
I’ll bet you’re using a service like credit karma which pinky-promises it is properly calculating your credit score. But is it really?
Nah their scoring model weighs different things differently. And over the past decade, I get a sense that they put more value on your open lines of credit themselves over closed credit in order to encourage people to open more credit cards (which is good business for banks, but not the customer).
https://www.cnbc.com/select/credit-karma-vs-fico-credit-scores/
Don’t put too much faith in those services to give you an accurate credit score, and personally I wouldn’t allow them access to my personal information - that’s just another avenue of attack by a hacker if they compromise the CreditKarma mainframes and steal your info.
If you’re paying 0% it won’t hurt to keep paying it monthly. If you have 12.5k laying around then invest it and make some money. Obviously if you had anything above 0% interest on the loan then paying it off would never be a bad thing.
If you have the means to pay it off early, I would. It is worse for your credit score, but you will feel great not having that payment hanging around your neck. I can practically guarantee that you won’t regret not having to make that payment each month.
If you dont want to take risks investing it chuck the savings in an account and have the loan payments taken from that account. If nothing else it keeps your funds liquid incase you need emergency cash.