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?

Answer
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 a prepayment 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.
Lauren Smith
Answered on Oct 29, 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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