4 Incredibly Easy Ways to Pay Off Your Car Loan Faster
Ah, being an adult. It’s mostly not what it’s cracked up to be. Sure, there are things you can do now that you couldn’t do when you first started driving. Like, being able to rent a car. And making your own decisions, like choosing to make cereal not just your breakfast, but also your lunch and dinner.
The downside to adulting? Debt. Bills. A never ending parade of non-fun things to do with your money. The silver lining is that the non-fun payments affords you the ability to drive to the 24-hour convenience store to get more cereal, whenever you want. So take heed, eat your cereal, and see below for the 4 easy ways you can pay off your car loan faster.
One way to really cut into that loan is by making payments early and often. For instance, submitting half the payments to your lender every two weeks instead of the traditional monthly payment is going to accomplish a great many things. For starters, you’ll have less interest, since your payments will be applied more often. For another, you’ll likely shave off several months of your repayment. Which is great. The sooner you can pay off that car, the sooner you can get back to spending money on your dog, who is a celebrity on Instagram.
We know. You work so hard for your money. And it feels so much better to be spending it on things like five scoops of ice cream or that tenth round of drinks. But every pay cheque you get, until you’ve paid off that loan, is money that can no longer afford to go towards buying shots for the entire table on a Friday night. Instead of just paying what is recommended, round your payments up the nearest $50 to help cut down your loan more quickly. It might not seem like much, but after a few months, you’ll notice it adds up in a big way.
Refinance Your Loan
This is the big guns. Where you take your loan in and negotiate a new monthly payment and pay-off date. However, you should only do this if it gets you on a lower monthly payment plan or will get you to a debt-free sooner date, which is a date we all love. If the end goal doesn’t benefit you (i.e. you’re lowering your monthly rate but lengthening the term), then don’t. That’s backwards math. Which is never good math.
Don’t Skip Your Payments
Last, but not least, pay early and pay often and don’t ever, ever be late on your payments. Some lenders are lenient and let you skip once or twice a year. Don’t fall back on that safety net. Pay what you can, when you can. Otherwise, you’ll fall into a habit of missing payments, which is detrimental to your credit score. Try setting up reminders on your phone, or install third party apps to help you visualize and manage your money. It’s the small things that can get you back on track to putting more money into your car payments, so you aren’t swallowed by debt and can back to what really matters: blanket forts.