close unneeded new loan, or wait a few months

[Anonymous]

So I took a personal loan that I ended up not needing.

Solely from a scoring perspective, would it be best to keep it active a few months before paying it off, vs just paying it back now?

I believe I have seen score bumps at 3 and 6 months with my cc's vs one I had cosed immediately. But it could have been unrelated.

[AllZero]

Who is the lender?

Do they allow you to pay in advance without shortening the loan term?

[Anonymous]

the loan was with upstart.

hmm.. Paying the bulk in advance will seem to just save me from using the cash, or missing a payment, correct? If so, I'm not too worried about that. 

maybe pay half(?) now so the outstanding balance drops significantly, and then make the payments for a while?

[Anonymous]

now that Ithink about it, it seems that may have been the same end result you were talking about LOL

[AllZero]

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@Anonymous wrote:

the loan was with upstart.

hmm.. Paying the bulk in advance will seem to just save me from using the cash, or missing a payment, correct? If so, I'm not too worried about that. 

maybe pay half(?) now so the outstanding balance drops significantly, and then make the payments for a while?

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How long is your loan term?

I'm not familiar with Upstart and if the below technique will work.

For FICO scoring purposes, if that's your only open installment loan, ideally, you want to pay down to 9% utilization and keep the loan open as long as possible. That is if your APR% isn't too high. Paying the bulk in advance should save you on interest.

You'll see a FICO score increase for an almost paid off loan. However, you'll lose those points you gained once loan is closed.

If you have other open installment loans, then that technique might not be relevant.

I would recommend reading the below from CreditGuyInDixie
Adding an installment loan -- the Share Secure technique
The Quest for an SSL alternative to Alliant

[Anonymous]

I have 2 other installment loans (car and motorcycle). about 25k balance on 31k. The loan in question only is for 3k. I'm about to get another 20k car loan (2nd car for family), so this 3k probably wont matter either way. But if can squeeze a few points out of, I'm all for it - I'm 6 points from qualifying for my CU's best car loan rate. 

[Anonymous]

If you have other open loans there is no benefit at all of keeping the loan you don't need open.  You can close it out at any time and be done with it.  It will not adversely impact your scores.  In fact, having one less account with a balance is a good thing and could help you a couple of points depending on the scoring model.

[AllZero]

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@Anonymous wrote:

I have 2 other installment loans (car and motorcycle). about 25k balance on 31k. The loan in question only is for 3k. I'm about to get another 20k car loan (2nd car for family), so this 3k probably wont matter either way. But if can squeeze a few points out of, I'm all for it - I'm 6 points from qualifying for my CU's best car loan rate. 

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Agreed with BBB. You have other open installment loans.

You can try to optimize your open revolving accounts to squeeze out a few more points.

[SouthJamaica]

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@Anonymous wrote:

I have 2 other installment loans (car and motorcycle). about 25k balance on 31k. The loan in question only is for 3k. I'm about to get another 20k car loan (2nd car for family), so this 3k probably wont matter either way. But if can squeeze a few points out of, I'm all for it - I'm 6 points from qualifying for my CU's best car loan rate. 

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It's not going to mean anything for your score.