How do I pay off my car loan?

How can I quickly pay off my car loan? I have been making loan payments for two and half years. I’m planning to go to get my Master’s degree in England and need to save.

Answer
That’s exciting to get your Master’s degree abroad! It’s true that the sooner you can pay off your loan, the sooner you will have extra money in your pocket. Here are some ways to help you pay off your car loan:
  • Put more money towards your principal: Instead of paying the minimum loan payment every month, consider increasing your monthly payments to help you pay off your loan faster. If you don’t have wiggle room in your budget to do this, don’t overextend yourself and put yourself into more debt to pay off this loan.
  • Round up your payment: Try rounding up your minimum loan payment by whatever you can afford. Even an extra $25 a month can make a big difference.
  • Bi-weekly payments: Lenders will offer different payment options when negotiating the length of your loan. If you opted for the monthly payment option, consider talking to your lender and asking if you can change your payment plan to bi-weekly. You’ll actually end up paying the same amount every month but make 13 payments instead of 12 in a year.
  • Refinance your loan: Refinancing can help reduce your monthly payments or your interest rate. Either of these can help you pay off your loan faster.
That said, before paying more on your loan, confirm with your lender that they don’t charge prepayment penalties. Some lenders charge additional fees if you pay your loan off early, so you’ll want to review all your options before making extra payments.
If you’d like to explore your refinancing options, use Jerry. Jerry is a great resource for comparing loan options from multiple lenders. Use our refinance calculator and avoid the hassle of searching for lenders yourself. Jerry makes it easy by finding the best lenders at the best rates.
Phoebe Mah
Answered on Dec 03, 2021
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