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Can I pay off a car loan without accruing interest?
I want to pay off my car loan without paying any interest. Is that possible? The dealer has plenty of incentives to finance with them, but I have cash.
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Great question! I’m happy to say that it’s definitely possible, and that many buyers do the same thing that you’re doing. In order to pay off your car loan without accruing interest, get a
car loan
through the dealer for bonus cash and incentives. Then, simply pay off the loan as soon as you get a chance.While dealerships might not love this, you can definitely do it as long as your car loan contract doesn’t stipulate otherwise.
However, you’re still going to accrue some interest. This is inevitable, but if you pay off your car loan in a month or so, the amount of interest you owe will probably be far less than the amount you gained through bonuses and incentives.
In some rare cases, you might be able to find a 0% APR loan from dealerships on a promotional basis. This is probably the only way you could ever get a car loan without paying interest, which means you should shop around to see if anyone is offering this deal.
If you hate paying interest, you should also pay your car insurance bill in full every six to 12 months and regularly check car insurance quotes. One easy way to save even more money on car insurance is through the
Jerry
app—we’ll get you customized quotes in just minutes so all you need to do is pick the plan that works best for you!Best of luck with the car loan!
MORE: What is APR and how is it calculated?
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- Gregory R.
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