Can you pay extra principal on a car loan?

Is there any way for me to pay extra principal on my car loan? I want to pay my loan off as quickly as possible. I’ve heard it’s faster if you make extra payments on the principal, but I’m not sure how I can do that.

Answer
It’s true, making extra payments on your principal can help you pay down your loan faster and will also save you money!
Many lenders allow you to make extra payments to reduce the principal of your loan. That said, you’ll need to discuss your options with your lender to be sure. Sometimes, lenders charge prepayment penalties if you pay off your loan early, so check before making extra payments.
If your lender allows you to make extra payments, keep in mind that you pay for interest and fees first when you make loan payments. You’ll need to ask your lender to apply extra payments to the principal of your loan. If possible, try making payments every other week rather than every month to reduce your principal as quickly as possible.
While you’re working to reduce the principal on your loan, why not take some steps to reduce your monthly car insurance payment, too? The Jerry app makes it easy to find the best rates on car insurance. All you have to do is download the app and answer some quick questions and Jerry will show you a comprehensive list of quotes curated for you. Once you find a policy you like, Jerry can help you cancel your old one!
Liz Jenson
Answered on Nov 17, 2021
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