Depending on how you decided to shop for a car you may have bitten off more than you could chew. Paying off debt is hard, but if you’re determined to pay off your car loan sooner rather than later these 5 hacks can help you do it.
Instead of making one monthly payment, split it in half and make payments every two weeks. You’re technically still paying the same amount per month, but by the end of the year, you will have made two more biweekly payments (one full payment). This is because most months are longer than an exact 4 weeks. This can shave off several months over the term of your loan.
Be sure to check with your lender before using the bi-weekly payment method. You may be penalized for extra payments, or for paying off your loan early.
Rounding up your payments, like bi-weekly payments is another easy way to pay off your loan faster. If your payment is $263, round up to $300. Most likely, you won’t even miss the $37. And over the course of a year, depending on how much you’ve rounded, you can have paid hundreds more towards your loan.
There’s always the opportunity to get a lower interest rate by refinancing your loan through a new lender. Especially if your credit health has changed for the better since you first financed your car. Even if it’s only a few percent lower, that few percent can go a long way in saving you money and helping you pay off your loan faster. Check out what you're up against in your state, in terms of credit strength.
In an effort to be more environmentally friendly, many lenders offer a discount (roughly .25% off your interest rate) for going “paperless” and receiving all of your statements and correspondence electronically. For most people, paperless is faster and easier anyway, so it’s a win-win.
This hack takes quite a bit of self-control, but putting every bit of extra money you get throughout the year towards your car can help make major headway in paying off your loan. This can easily take hundreds if not thousands of dollars off your principle.
With a little bit of determination and these 5 hacks, you’ll be well on your pay to paying off your auto loan.
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