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Is payoff a good idea?

Nicholas Hinrichsen - Published: August 1, 2021

Have a loan on your car and have been asking yourself: 'is payoff a good idea?'
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Continuously asking yourself whether or not paying off your loan is a great mindset! Debt isn't necessarily a bad thing. Everybody should have 'some' debt. Debt allows you to benefit today from future earning.

However, the goal is to have debt at the best interest rate possible! Therefore, if you're asking yourself if paying off your auto loan is a good idea, the answer depends on two things:

  • What interest rate are you currently paying on the loan and can you get money somewhere else for a lower rate?
  • Do you have savings you could use to payoff your loan and can you not invest your savings for a higher return somewhere else?


In sum, a loan payoff is a great idea if the auto loan interest rate is very high, if you have savings and if you can't earn money through investing your savings anywhere else.undefined

Haven't explored refinancing yet? Take a look at our exhaustive article about all the auto refinance companies and you will realize,
WithClutch.com is the only fully digital platform that lets car owners like you do so from the comfort of their own home. No need to set a foot in a bank or credit union. You can lower your rate or get cash in as little as 20 seconds.

Follow three simple steps to refinance your auto loan, get approved in seconds and save thousands in minutes.