Paying Car Finance Early

amberperry

I have 2 years left on my car finance with Barclays and want to pay the settlement fee in full.
1. If I pay the settlement fee will this affect my credit score? I am currently saving for a House deposit so don't want to ruin my high credit score.
2. Will I be allowed to pay the settlement fee with a credit card? I have a 0% credit card that I would like to use so that I can pay it off within a year instead of 2 with the extra interest.

Thanks in advance

khid2

Hiya,

I dont believe it affects your credit score but it does make lenders less willing to lend to you as they dont see you as 'profitable' always as you have settled before the end of agreement. I can only comment from past experience. To be honest I dont think it would have a negative impact on a mortgage application as you will have less debt against your name and a mortgage is a long term thing generally anyway and you tend to remortgage every so often when your deal ends anyway.

I do believe you can pay with a credit card yes,just make sure you have an high enough credit limit on your credit card to cover the settlement figure.

How far off are you from saving for a house? Just remember the less borrowing you have when applying better chance on mortgage acceptance.

fusionx212

it won't affect your score it'll show the finance as full and settled..

whilst measured the same car finance is not considered the same as credit card debt, due to the fact you have physical goods you they can take back. where as credit cards you do not,

you have to bear in mind that if you use the full facility it may show you using your available credit etc.. but as long as repayment history is strong and you are not using stuff like payday loans then you have little to worry about.
Just keep an eye on your credit score.

[Deleted User]

1. You don't have a credit score. Just a credit history.
2. Check if they will accept a card payment. Generally you can't pay credit with credit.