You can pay off a loan early to avoid interest that you would have accrued if you’d have seen out the loan term with regular repayments.
Paying off a loan early allows you to spend or save the amount you would have been using to service the debt that you’ve just paid off, making it easier on your month-to-month finances.
You can reduce your debt to credit ratio by paying off a loan early, which in turn can help to improve your credit score.
Some lenders will allow you to pay off your loan early to avoid interest and not pay any fees or penalties, but you will have been told if this was the case when you initially took out the loan in the first place.
If you’re considering taking out a loan with the aim of paying it off early, you can compare loans and seek out lenders who won’t charge you an early repayment fee.