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Can you make principal-only payments on a car?
I want to pay down my car loan faster, but I'm not sure if I can. My mortgage allows principal-only payments. Does my car loan allow this?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
If you want to pay your
car loan
more quickly, making principal-only payments is always a great idea. This is the money that you pay solely to lower the price of principal on the loan, meaning it reduces your final price of the loan. A vast majority of lenders allow you to make principal-only payments with no limit to how many you make over the life of the loan. However, some lenders may levy
prepayment penalties
if you pay the car loan off early, meaning that extra principal-only payments aren’t always the best move.If your lender has no prepayment penalties, you can make as many payments as you want. If your lender has prepayment penalties, you could end up paying more.
It’s smart to find other ways to save money, as well. One of those ways is with your car insurance. Don’t overpay. Instead, download the
Jerry
app to compare dozens of quotes from some of the most reputable insurance carriers in the industry.View full answer
- Gregory R.
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