pay off existing loan before applying

[revvystoke]

Just wondering if I should pay off an existing loan before applying for a new loan to buy a new truck. I can pay it off completely now, it only has a 6k balance, but if it negatively effects my rates from their standpoint I can wait until after applying. Do they care about remaining balance or just the monthly payment. Looking for a short term 24-30 month loan for a new ram truck. No credit card debt just this loan. Have 10-15 paid loans in the past 3 years so I don't think it would matter but don't want to waste money paying extra interest.if I can avoid it.

[jhtrico1850]

The primary factor is your FICO. If it's over 760 it generally doesn't matter. I wouldn't pay it down unless you know it would significantly raise your fico.

[fury1995]

No.. with your scores, there probably won't be a requirement to close the existing open auto loan. If your income supports the second payment, the lenders won't care. They only get nervois if you have limited credit or experience with installment loans.