When you take out a car loan, you’re agreeing to pay off the car over time. Depending on the interest rate, this can take anywhere from 3-5 years. However, there are ways that you can pay off your car loan sooner – and we’re going to tell you how!
Put your extra towards your car loan
If you get a tax refund or receive a bonus at work, put that money towards your car loan. Any extra money you can throw at your car loan will help to reduce the amount of interest you pay and will help you pay off your loan sooner. If you get a pay raise, consider using that extra money to make larger payments on your car loan.
Save time and money. When you receive your car loan statement each month, do you immediately throw it away? If so, you’re not alone. According to a study by Car Loan Center, the average American spends $22 each month on car loan statements – that’s over $250 per year! Go paperless and you can save both time and money.
If you have the option to go paperless, do it! Not only will it save you money, but it’ll also help you stay on top of your car loan payments. You can set up automatic payments so you never have to worry about missing a payment – and if you ever do, you can easily view and manage your account online. Plus, you’ll always have access to your car loan statement so you can see how much you’ve paid off (and how much is left to go).
Refinance To A Lower Interest Rate
If you’re looking to pay off your car loan sooner, one of the best things you can do is refinance to a lower interest rate. This will reduce the amount of money you’re paying in interest, and free up more money to put towards the principal of the loan. If you have good credit, you may be able to qualify for a lower interest rate with a different lender. It’s worth shopping around to see what rates you can qualify for.
Round Up Your Payments
If you Round Up Your Payments, you will be able to quickly pay off your car loan. This is because you will be paying more than the minimum required amount each month, which will go towards the principal of the loan. By doing this, you will be able to reduce the interest payments and shorten the length of the loan.
Make Biweekly Payments
If you’re looking for a way to pay off your car loan sooner, making biweekly payments is a great option. By making biweekly payments, you’ll end up making one extra payment per year, which can help you pay off your loan faster. Plus, it can also help reduce the amount of interest you’ll pay over the life of the loan.
If you’re not sure how to set up biweekly payments, talk to your lender or car dealership. They can help you get set up and on your way to paying off your loan sooner.
There are a few things you can do to ensure that you pay off your car loan as quickly as possible. One of the most important things is to make sure that you make your payments on time, every single month. Late payments will not only add more interest to your loan balance, but it could also damage your credit score.
By following these simple tips, you can be debt-free in no time.