We’ve all heard it countless times: paying off debt is one of the wisest financial goals you can set. But while paying off your car or truck loan early may indeed be a smart move, it isn’t the best choice 100% of the time.

For one, the shorter your loan term, the less likely it will bring much benefit. If you financed your vehicle for just 3 years, you’ll probably gain little by retiring it early, since you already capitalized on lower interest rates by choosing a shorter term.

You’ll also want to check whether your loan carries a prepayment penalty, or if it involves precomputed interest. In contrast to simple interest, precomputed interest means paying the loan off early won’t reduce your ultimate interest expense.

If you’re clear on these are issues, paying off your loan early will reduce your total cost, which is always a good thing. In addition, it will free up money in your budget for other uses, will make it easier to sell or trade-in your vehicle, and if you’ll soon be applying for a mortgage, will helpfully lower your debt-to-income ratio.

On the other hand, keeping the loan can be great for your credit score, as it adds diversity to your credit profile and provides an opportunity to build your track record of on-time payments.

It’s also sensible to instead pay off any debts with a higher interest rate than your car loan. Credit card debt and personal loans are almost always a better use of your debt reduction dollars than a vehicle loan.

Lasty, if paying off your car or truck early leaves you with less cushion to weather unexpected expenses each month, or prevents you from establishing an adequate emergency fund, it’s smarter to fund that financial security first.