PriceProtect™
DriveShield™
GarageGuard™
Services
Insurance
Car Insurance
Compare Car Insurance with Jerry
Jerry’s Expert Advice
Car Insurance Estimates
Home & Renters Insurance
Renters Insurance
Loans
Car Loan
Compare Car Loans with Jerry
Jerry's Expert Advice
Car Loan Guides
Repairs
Car Repair Estimates
Repair Estimates for Popular Services
Advice
Read Car Content
Browse Jerry Car Advice
Check Out Expert Car QnA
Learn About How We Create Content
Jerry Data & Research
How can you pay off a car loan?
I took out a car loan about a year ago, and I’ve been able to make every payment on time, but I recently graduated from law school and want to use my graduation money to pay off the loan entirely. How do you pay off a car loan before the term is up?
Jack Walsh · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
First of all, congratulations on finishing law school! That’s a major accomplishment, and you should feel proud.
To pay off your
car loan
, you need to contact the lender to confirm it can be done and, if allowed, ask how they would like the payment to be made. Keep in mind that not all lenders permit an early payoff. Even if yours does, you should consider if it is the right decision. Paying off your car loan early has many benefits, such as:
- Having full ownership of your vehicle with a free and clear title
- Having some additional disposable income each month by no longer having a monthly payment with interest
- Improving your debt-to-income ratio
- Avoiding anupside-down car loan
However, paying off your car loan early has drawbacks as well, such as:
- Causing a temporary dip in your credit score
- Not being the most effective use of money, especially if you have other debts with higher interest rates
If you do pay off the loan early, don’t forget to inform your
car insurance
company of the change so they can adjust your rate now that you no longer have a lienholder
on the title. To ensure you’re not overpaying for coverage, use
Jerry
, an insurance comparison app that can collect quotes from more than 50 top insurance companies, like Travelers, Nationwide, and Progressive, in seconds. Once you make a selection, Jerry will take care of all the paperwork and phone calls for you, and if you ever have any questions, agents are just a text away! View full answer
- Gregory R.
WHY YOU CAN TRUST JERRY
Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
Join 4M+ members in lowering their car insurance
You Might Also Be Interested
Read Advice From Car Experts At Jerry
What Others Are Asking
.jpg&w=64&q=75){kind=avatar}
Browse More Content
Insurance for Your Car
Insurance in Your State
Easiest way to compare and buy car insurance
No long forms
No spam or unwanted phone calls
Quotes from top insurance companies
