Can I save money by paying off my car loan early?

My great uncle passed away and left me some money. I'm thinking of using it to pay off my debts, like my car loan. But I've still got a couple of years left on it. Will I save money by paying off my car loan ahead of time?

Answer
I’m sorry for your loss. Losing a family member is so tough.
It’s very financially responsible of you to consider putting the money you were gifted toward your car. You may or may not be able to save money by paying off your car loan early, depending on your loan agreement.
Before attempting to pay off the loan, read your loan paperwork carefully or call your lender to ask about prepayment penalties. Because you will be saving years’ worth of interest, some lenders charge fees for paying off the loan balance early.
Whether you pay off your loan early or not, you can save money on other car expenses with Jerry. Jerry is an insurance comparison app that shops for low prices with over 50 different insurance companies for free. You will get quotes in seconds, can make changes at any time, and if you ever have any questions, agents are just a text away!
The average Jerry user saves $879 a year on car insurance.
Lauren Smith
Answered on Nov 19, 2021
Lauren has written for World Nomads, the Matador Network, Korvia Consulting, and once upon a time Three Fates Games. She graduated from Columbia College of Chicago with a BFA in Creative Writing. After graduating, she moved overseas and lived in South Korea where she spent her free time traveling and going on road trips with friends. She misses the rest stop potatoes and is trying to figure out how to recreate them at home. She's now based outside of Chicago and when she's not writing she spends her free time reading, playing video games, and exploring whenever she can.
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