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How do you avoid paying interest on a car loan?
Is there any way I can get out of paying interest on a car loan? I want to get a new car, but I’m worried that I won’t be able to afford the insurance rates. What can I do?
Liz Jenson · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Unfortunately, it’s very difficult to avoid paying interest on a car loan. You’ll need to score a 0% APR to avoid any additional fees as you’re paying off your car, and a 0% APR is very difficult to get since interest rates are largely calculated based on your credit score. If your score is below 750, it’s unlikely that you’ll be offered a 0% APR loan.
However, there are some things you can do to improve your car loan interest rate, including:
- Opting for a shorter repayment period
- Shopping around for the best terms before settling on a loan
- Paying off any outstanding debts or otherwise improving your debt-to-income ratio (DTI)
- Always paying your bills on time
- Refinancing your loan if necessary
It might also help to lower your monthly car insurance payment so you can use the extra cash for your vehicle. The
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app makes it quick and easy to find the best rates available on the coverage you need. Just download the app and answer some quick questions to see quotes customized for you.View full answer
- Gregory R.
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