You can pay off an installment loan early, but this won't have a major effect on your credit score. Paying it off early can, however, save you money on interest. If you pay off the loan several years early, this can bring you significant savings. But be cautious: Some installment loans have prepayment penalties. When looking for the best installment loans on offer, check the fine print for such penalties; if you hope to be able to pay off your loan early, avoid any offers that will charge you this fee.