<prompt> Human: EDIT: Hey-oo, looks like rpersonal finance just saved future me from 25k of debt! Thanks for the insight and advice, it seems pretty unanimous that this is a decision I do not want to make.Original Post:So Ill be graduating college in a few months and am eligible to take out this loan at any point I like between now and around May 2014. Repayment is over 5 years, no early payment penalties. To me, this sounds like a really great opportunity to both build credit and possibly learn something about fiscal responsibilityinvestingretirement along the way. Pretty much the only thing I absolutely need is a new car my old one is a deathtrap. Some misc info: No student loans or any debt Starting salary is around 45k I was thinking Id invest 10k immediately to start off a Roth IRA someone told me that the first year you open an account you can deposit for both the current and previous year as well - is this true? My max price for the car is 15k-20k probably buying recently used - 2009-2012ish, so I would be taking out a loan for the difference, I suppose. Should I just put it all down on the caris 2.99 a better APR than most used car loans? Kelly BB on old car is around 2-3k though some places give you like 5k on the spot for trade-ins I think? I was thinking about investing in a CD, but I was advised with interest, current rates, and inflation I wouldnt really be coming out ahead much.I guess really I have no idea what to make of this loan, so what would you do with it? Happy to answer any other relevant questions. Thanks a ton in advance!Assistant: You have no debt, and are starting a careerlifeetc. Why on earth would you want to add 25k in debt to an otherwise great start? I was thinking Id invest 10k immediately to start off a Roth IRA someone told me that the first year you open an account you can deposit for both the current and previous year as well - is this true?How about you just open an IRA and contribute to it? Lets skip all the borrowing money at 3 in order to fund your retirement. Best case, youre giving away 3 of your returns, and worst case is the market crashes and youre paying 3 on something thats worth 25 of what you paid for it. Leveraged investing is not for the average person. My max price for the car is 15k-20k probably buying recently used - 2009-2012ish, so I would be taking out a loan for the difference, I suppose. Should I just put it all down on the caris 2.99 a better APR than most used car loans?Dont spend half your salary on a car. Find something in the 5k-10k range, and get a loan from Penfed.org for 1.49 assuming you have good credit. Kelly BB on old car is around 2-3k though some places give you like 5k on the spot for trade-ins I think?No one will give you more than the car is worth wholesale. If one place will give you 2k extra, that means they are charging you 2k extra on the car youre buying. Your best bet is to sell the car directly on Craigslist, and avoid trading it into a dealer. I was thinking about investing in a CD, but I was advised with interest, current rates, and inflation I wouldnt really be coming out ahead much.Youre going to borrow money at 3, and invest it in something that you know will pay 1.25? What?tl;dr - you dont need the loan for any of the reasons you listed. Do not take a loan and use the money to invest. Human: I appreciate the candidness of your response. What about taking the loan for the opportunity for good credit, just to pay it back? I have no clue what my credit score is right now no black marks though, or how much a loan like this could positively impact my credit score. In fact, my understanding of the importance of credit is rather loose.  <response>: Its never a good idea to pay money to have a higher credit score.Whats the point of a credit score? To save money in the long run on large loans like car loans and mortgages. Meanwhile, youre considering paying money into the system just to increase your score.Its like climbing a mountain that has a 5000 cash prize at the top, but instead of climbing it yourself, youre paying someone 10k to helicopter you up to the top. Sure, you still got the prize, but because you tried to get there too quickly you wasted a ton of money. 