If you have some extra money and are making payments on an auto loan, you may have thought of creative ways you can pay down your car loan faster. But how do you approach this?
There are a few ways you can save on your auto loan payments:
Add More When Possible
Although this may not be possible for many, adding an extra amount to your auto loan payment does not hurt. If you have extra money laying around, consider putting it towards your auto loan. Even $20 extra every two months could save you money on interest charges.
Make Payments Bi-Weekly
One trick to pay off your car loan faster is by making half-payments every two weeks instead of just 1 once a month. With this tactic, you will end up making 13 complete payments per year instead of just 12.
When you lower the number of payments, the overall interest you pay is lower. Because making bi-weekly payments may require available money, be sure to check your budget to see if this is something you can afford to do.
If you have some extra cash, you should consider rounding up your total monthly payment amount. For instance, if your payment was $271 per month, add an additional $29 to make the payment an even $300. This method allows you to pay off your loan quickly. You will also save on interest as the remaining principle.
Another trick to paying less for your auto loan is payment splitting. Payment splitting is when you pay half of the total amount early in the month, and the other half towards the end of the month. This reduces the total number of interest charges, thus leading to a less expensive auto loan.
Paying Off An Auto Loan Early
It’s important to note that some lenders will not allow you to pay off your auto loan early, so be sure to check your contract. Paying off a loan early does not hurt your credit score. In fact, having paid off an auto loan early will show lenders you are dedicated to repaying them.
All in all, there are many great truck choices for under $10,000. If you are looking to buy a new car but have less than perfect credit, CrediReady can help. Our nationwide network of trusted dealers and verified lenders work with buyers in all credit situations. Take a moment to fill out our free no-obligation loan inquiry form and start shopping for your dream car today!