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How do I pay off a car loan quickly?
I’m thinking about getting a car, but I don’t have enough money to flat out buy one. I’ve heard my friends complain about their car loans and the strain on their finances for years, so I'm a bit hesitant to finance a car. How can I pay a car loan off quickly?
Lauren Smith · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
It’s normal (and wise) to be weary of adding on an additional financial burden. If your budget allows, you can try to pay down the principal of your loan, make biweekly payments, or pay extra. These options can help you pay off your loan faster.
Paying off a loan quickly also starts with finding a good loan. When financing a car, you can set yourself up for financial success by paying close attention to the following:
- APR. This is your annual percentage rate, aka, how much interest you’ll pay. You want this number small.
- Downpayment. If you can afford it, the larger your downpayment, the less your overall loan will be, and the more favorable your terms can become. The downpayment is how much you pay out of pocket before the loan kicks in.
- Term Length. Term lengths are measured in months.The current average is 72 months, which translates into six years. Try for a shorter term if you can afford it.
- Check over the deals carefully, especially for any penalties such as aprepayment penalty. This would fine you for paying your loan off early.
One way to make sure you have more money to put towards your loan is by having the best deal on your car insurance.
You can make sure you’re getting the best deal with the
Jerry
app. Jerry compares personalized quotes from up to 50 top insurance companies, including Nationwide, Allstate, and Travelers, and Jerry takes care of the rest. No long forms. No calling around. No hard work. Just savings. The average Jerry user saves $879 a year on car insurance.View full answer
- Gregory R.
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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.
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