There are few things more satisfying than owning your car outright. Not only do you have the freedom to drive without worry, but you also save money in the long run by not having to make monthly loan payments.
If you’re currently making car loan payments, you may be wondering how to pay off your loan faster and own your car free and clear. Here are a few guaranteed ways to do just that:
1. Make biweekly payments
If you are unsure about how to pay off a car loan faster, one easy way to do it is simply to make bi-weekly payments instead of monthly payments. This may not seem like much, but it can shave months or even years off of your loan.
How does it work? When you make a monthly payment, that payment is usually applied to the interest first and the principal second. But when you make a bi-weekly payment, half of that payment is applied to the interest and the other half to the principal.
2. Round up your payments
If making an extra payment each month isn’t possible, you can still make headway by rounding up your payments. For example, if your monthly car payment is $325, you can round up to $350. That extra $25 may not seem like much, but it can add up over time.
3. Make extra payments when you can
Another easy way to pay off your car loan faster is to make one extra payment per year. This doesn’t mean you have to double up on your monthly payments. Instead, you can simply make 13 payments instead of 12.
How does this help? When you make that 13th payment, you essentially make an extra partial payment. This extra payment will be applied to your loan’s principal, which will reduce the interest you pay over the life of the loan.
4. Refinance your loan
If you’re struggling to make your car loan payments, you may be able to refinance your loan and get a lower interest rate. This will lower your monthly payments and help you repay your loan faster.
To qualify for a refinance, you’ll need to have good credit. But if you do, it’s definitely worth considering. If you’re like most people, you probably don’t think too much about your car payments. You just sign on the dotted line, hand over your hard-earned cash, and drive away. But what if there were some easy ways to get rid of debt fast? You have just seen a few guaranteed ways to do just that.
Make a lump sum payment
If you come into some extrIf you’re currently making car loan payments, you may be wondering how to pay off your loan faster and own your car free and clear.a money, whether it’s from a bonus at work, a tax refund, or some other windfall, you can save money on interest by making a lump sum payment on your loan. The smaller the loan balance, the less interest you’ll pay over the life of the loan.
Make payments early
If you have the ability to make early payments on your car loan, you can save money on interest. When you make a payment, that payment is applied to the interest first, and the remainder is applied to the principal. By making a payment early, you can reduce the amount of interest that accrues, saving you money.
Paying off your car loan doesn’t have to be a long, drawn-out process. These guaranteed ways to pay off your loan faster can help you get the job done sooner than you think.