Why to Pay Off Car Loan Faster Than Your Loan Term?
Smart consumers lead wiser financial life. Maybe they cannot avoid loans, but they do know how to save on making lesser interest payments, improve credit scores and lower their debt to income ratio, all in one stroke. Wondering how? Simple. By paying off your car loan early. Your lender must allow this with or without extra charges in any form. If you save enough, do it. If not, do not.
How Paying Off a Car Loan Early Becomes Possible
We at Getcarloanswithbadcredit – a car loan company for bad credit bring you 6 important ways to pay off car loan faster to lower your debt burden.
- Pay half of monthly payment every two weeks - This is a magic trick to squeeze in one more monthly payment in a single 12-month year! Magic is actually sleight of hand. So, we tweak 52 weeks of a year to make 26 half payments instead of 12 full payments. That is 13 full monthly payments!
- Power of rounding up - Don’t stick to your EMI amount – round it up to 50 or 100 whichever is higher and affordable. For example, round up $222.47 to $250 or $300.
- Make one large extra payment per year - Round up outstanding every year to nearest thousand. Do it anytime for quickest way to pay off a car loan. Save hundreds of thousands of dollars and become debt free earlier!
- Make at least one large payment over the term of the loan - When you make lump sum payments, you reduce principal amount and save on subsequent interest. You are also reducing your auto loan term. Make these payments early on to save more.
- Never miss a payment - Lenders may not penalize you for missing a payment or two. Surely, you will pay more interest over more months.
- Refinance your loan - This is a trick situation. Find lenders willing to give you extremely reasonable rates. Auto refinancing gives you much lower interest rates, lower monthly car payments and a shorter term. Otherwise, it is simply not financially smarter refinancing.
Experience the Power of Paying Your Car Loan off Early
You can literally swing a ‘Game Point’ to your ‘Advantage’ just like in Wimbledon. The beauty is there are a number of ways of doing it:
- Paying off a car loan early - Putting in extra payments earlier than necessary is best way to pay off car loan early. It allows you to knock down all ten pins and score a strike in this bowling lane.
- Eliminating debt payment increases your income - Say goodbye to tight monthly financial budgets! Money saved is money earned. A non-existent monthly car payment means a few extra couple of hundred dollars every month.
- Save on interest 32 - Money flows in two directions. However, both destinations are towards an “Interest.” The million-dollar choice is either paying or earning interest. No auto loan, no interest payments. It is as simple as that!
- Investing savings to make your money earn money for you - Why let your savings of monthly car payment idle in an account. Rather than spending it after paying your car loan off early, invest it wisely.
- Lower insurance premiums - Car loans demand expensive full coverage insurance. Once drivers own a personal vehicle outright, they become responsible and drive safely. This reduces their car insurance costs greatly.