Originally Posted by
Fondue
Hi,
I am a credit scrub, I don't own anything besides my car which has been paid off forever.
So I'm getting a new car and going to finance half of it to "build credit" but I only want the loan for a term of a year. The dealership only offers 2+ year loans but the dude said I could pay it off early with no penalty and that seemed to have a low interest rate (2-3%). When I check with my bank their APR (went from 4%+ for 1 yr to 3.something% for 2+) is higher the shorter of a term you get a loan for.
So if there is no penalty on paying it off early and it wont look bad for my credit why would I not get a long term loan with a low APR and pay it off much sooner than the term was for? Why does this not seem like it makes sense if you have the money to put up multiple months payments at the same time?