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How do you pay off a car loan in full?
Is there a good way for me to pay off my car loan in full quickly? I took out the loan a couple of years ago, and I want to pay it off as soon as I can because I’m going to take out another loan to buy my daughter a car once she turns 16.
Liz Jenson · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Here are a few things that you can try to pay off your current car loan in full more quickly:
- Shorten your repayment period. You can talk to your lender about shortening your repayment period on your current loan. You’ll likely have to refinance it to get a shorter repayment period. Regardless, shortening the length of your loan will result in larger monthly payments, meaning you’ll pay the loan off sooner (and probably pay less in interest, too).
- Refinance the loan.. This can help you get a shorter repayment period, but it can also help you find better rates on your loan. If your credit score has improved since you took out your loan, you may qualify for a lower interest rate, which would make it easier to pay off the remaining balance.
- Round up. Every time you make a loan payment, round up to the nearest $10, $50, or $100 to pay off as much of your loan as possible each time.
- Make extra payments. If you can, make extra payments on your loan as often as possible to pay off as much of the principal as you can.
Keep in mind that some lenders charge
prepayment penalties
when you pay off your loan early, so check your contract for built-in fees of this type. While you’re looking for ways to pay off your car loan, why not take a minute to shop for better insurance rates, too? It’s easy when you use the
Jerry
app! Jerry compares personalized rates from more than 50 top providers and delivers the best deals to your phone in minutes for free. The average Jerry driver saves $879 a year on car insurance!MORE: Does refinancing a car hurt your credit score?
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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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