How do I pay toward the principal on a car loan?

I want to pay off my car loan early and my mom told me that I should pay toward the principal of the car loan. I’m not sure how to do this. What’s the best way to make payments toward the principal?

Answer
If you want to pay your car loan off early, paying toward the principal is an awesome place to start! Fortunately, this payment is easy to make.
To pay money toward the principal of your car loan, you usually have these options:
  • Pay online, but click the principal-only payment button
  • Call your lender and tell them you want to make a principal-only payment
  • Send in a check to your lender with a memo that says principal-only payment
If you’re confused about the process, a quick call to your lender should resolve the situation.
Every payment you make toward the principal shrinks the life of your loan. In the end, you pay less in interest than you would at the initial onset of the loan.
If you want more money to put toward your principal payments, make sure to review your car insurance regularly. You can use the Jerry app to compare quotes from over 50 top-rated insurers so you always get the lowest rate for your car insurance needs.
Eric Schad
Answered on Nov 09, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
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