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Paying off car loan and getting another

New Member

Paying off car loan and getting another

Hi everyone, new to the board with a question.

 

In August of 2011, I took an auto loan out for $8,000 @ 6.% from my local bank (without a cosigner). The term was 54 months. After careful saving and planning, I have enough money to pay my auto loan in full ($5500) 3 years ahead of schedule.

 

My question is, will it hurt my credit score or set me up for a potential loan denial if I get another auto loan soon after I pay this one off (probably a month after or so)? I planned on taking another $6-8000 out to finance a newer car (need a larger vehicle for work)

 

Is there a "waiting" period when applying for loans when you just recently paid off one? Wil it hurt my credit paying off early?

 

My last fico score was 733, and my Credit Karma is 751 (I pulled the big 3 credit reports last year and were all above 720), I'm using less than 15% of my avail credit ($15,000 credit limit across 3 cards). Never missed a payment, no derrogatory remarks, 5 years of credit history. I've had 2 auto loans out for $7-10000 in my name without a cosigner.

 

Thanks in advance

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2 REPLIES
Valued Contributor

Re: Paying off car loan and getting another

Pay it off, and wait for the reported pay off to show up on your credit report.

 

Once that has occured go out and get your next vehicle.

 

Your score may change a bit, but it shouldn't be a problem.

 

If anything the lender will like that the loan is paid off and your DTI is better.

Too many INQs & low AAoA so I'm off to tend the Garden.     Age:23    


     $17k       $8.5K          Closed          $19k      $6.5k        $24.2k        Closed         $5k       Closed     $8.5k        Closed      @2.49%
Message 2 of 3
New Contributor

Re: Paying off car loan and getting another

You should have no problems with your scores. You could even get approved while the other one is on there if u wanted to.
Message 3 of 3