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How do you pay off your car loan early?
I took out my car loan years ago, and now I have a much better-paying job. I’ve been thinking about paying off the loan. Can I pay off the rest of my car loan early? If so, how?
Jack Walsh · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
It’s great that you have a better-paying job! To pay off your
car loan
early, you need to contact your lender. Policies differ and no two lenders are the same, so you’ll need to ask your lender how to proceed.Additionally, before you make a payment, you should:
- Confirm you can end the loan early
- Ask if there are anyprepayment penaltiesthat could negate the benefits of paying off the loan early
If you pay off your loan, don’t forget to update your
car insurance
company and consider whether you still want to maintain full coverage on your vehicle. You will no longer be required to carry comprehensive coverage
or collision coverage
—although it’s smart to maintain this level of coverage if you can afford it.To adjust your coverage and ensure you aren’t overpaying, download
Jerry
. Jerry is an insurance comparison app that shops for low prices with over 50 top insurance companies like Nationwide and Progressive for free. If you’re hesitant to switch plans or insurance providers because you’re worried about the work involved, don’t be. Jerry does all the paperwork for you and even helps cancel your old policy! View full answer
- Gregory R.
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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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