Q. I am six months into a 60-month auto loan at 24% interest because I've had previous credit problems. I am now able to pay off the balance of the loan. Should I do that, or should I leave it open to rebuild good credit?

A. You certainly have to rebuild your credit, and a consistent record of on-time payments on your auto loan will go a long way toward doing that and improving your credit score.

On the other hand, we hate to see you build that record of on-time payments with such an expensive loan. Paying off any loan that's charging 24% interest will save you a lot of money.

So here's what to consider in making this decision:

You don't mention whether you have any other outstanding debts, but if you do, you need to be sure that you have enough money to pay them each month without fail. These would include rent, utilities, credit cards, student loans and medical bills -- any monthly bills you pay.

If paying off your auto loan would drain your savings and jeopardize your ability to pay these bills, don't do it.

On the other hand, if you have other monthly bills you can use to build a payment history, and retiring the car loan won't jeopardize your ability to repay them, then go ahead and get out from under the pricey auto loan.

One final word of warning: Auto loans for borrowers with bad credit can have some costly terms in the fine print, such as prepayment penalties that require borrowers to pay three or four months of extra interest if they pay off the car early.

Be sure and ask you lender how much it will actually cost to repay this loan early. It may be more than the outstanding balance on the loan.