With more and more new customers being able to buy a new car, more and more new cars are being launched to meet their all-time high expectations. Readily available financing solutions have made it much easier for people to buy the cars they desire. So, if you are among those looking to buy a new car, it is worth doing a little research and learning how to pay off a car loan faster than usual.
We are still living in an era in which the car is the second most expensive purchase that most people make, after a home. So, no matter which financing option you choose, you will need to dedicate a part of your income to paying off the loan for a medium to long-term period of time.
With this in mind, it makes a lot of sense to look for ways to pay off your car loan faster. This is true, not just in the case of getting out of loans with extreme financial terms, but also in terms of allowing you to work towards achieving your dreams that are otherwise being held back. Here is what you can do:
- Start by chatting with your financier and creating an efficient payment schedule that you can follow to repay a part of your loan every two weeks. You may not be aware of it, but this arrangement turns out to be much quicker than the usual payment methods.
- In most cases, you get some kind of lump sum payment from different sources every year. This might be from a dividend receipt, a bank deposit maturing, or even an extra sum you get as a bonus. The trick is to fight the urge to spend the windfall somewhere else and use it to pay off the car loan instead.
- If you are not very busy at the workplace, you may have the chance to pick up a new paid assignment that can help you earn extra. The money you earn from such a decision can go a long way towards paying off the loan on your car.
How Can YOu Pay Down a Car Loan Faster?
When you pay off your debt much earlier than expected, you can lower the interest amount which you would otherwise spend on the car loan, especially with used cars. This saves you money which you can then use in different areas , so let’s dig in to learn a few of the most-used and workable methods for quickly paying off your used car loans –
Increased Down Payments
Are you left with an extra amount when you are done with buying a used car? If so, why not use that money to make a bigger lump-sum down payment? When you pay a higher down payment, it can reduce the monthly installments. If you owe less money on your car loan, it makes it much easier to pay off early.
Have you gotten an extra payment for something ? Or have your investments yielded a higher profit than you expected? In those cases, you can use that money for making prepayments. This lowers the loan amount and saves you a large amount on the interest. Borrowers can make car loan prepayments online, but it is always a wise choice to double-check the prepayment fees before proceeding further. Aside from the used car interest rates, the lenders also charge a small prepayment penalty on the remaining loan balance.
Use spare change from your daily transactions.
Spare change from your daily transactions can also help you to pay off your car loan and get out of auto debt faster than expected. If you are not sure how to pay your car off faster, getting the Paydownhero app can help make things easier. When you use the app for daily purchases, Paydownhero automatically adds an additional payment to the ones you are currently making. In other words, when you make daily transactions, Paydownhero automatically rounds up your spare change to the next dollar, and uses that change to make extra payments on your loan. Even the small change results in real savings.
Using the above tips makes it easier for you to answer the question – “How can I pay a loan off faster?” The sooner you make payments for your car loan, the more money you can put into your account. This will allow you to reach your next financial objective as quickly as possible.