PriceProtect™
DriveShield™
GarageGuard™
Services
Insurance
Car Insurance
Compare Car Insurance with Jerry
Jerry’s Expert Advice
Car Insurance Estimates
Home & Renters Insurance
Renters Insurance
Loans
Car Loan
Compare Car Loans with Jerry
Jerry's Expert Advice
Car Loan Guides
Repairs
Car Repair Estimates
Repair Estimates for Popular Services
Advice
Read Car Content
Browse Jerry Car Advice
Check Out Expert Car QnA
Learn About How We Create Content
Jerry Data & Research
Should I pay extra on my car loan?
I got a raise at my job and can afford to chip away a little more on my car loan. Is it smart to make extra car loan payments?
Lauren Smith · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Congratulations on the raise! You can pay extra on your car loan, but before doing so, you should carefully consider your finances and look over your loan agreement.
Your finances: Your car loan may seem like a daunting debt that’s hanging over your head, so it makes sense to want to tackle it. However, the interest rate on car loans is usually pretty low.
Before paying extra on your car, ensure you don’t have higher-interest debt you should get rid of first. Also, consider whether you might be better off padding your savings account or emergency fund instead.
The loan agreement: I know it’s boring, but read the fine print. Sometimes lenders will put sneaky phrasing into their loan agreements to prevent you from getting out of your loan early.
These are called
prepayment penalties
. If the loan paperwork seems difficult to understand, call your lender to ask questions about making extra payments and potential associated fees.If you don’t get the answer you want from your lender, know that you can still make changes to your car loan by refinancing. You may qualify for better rates that can save you hundreds of dollars in the long run.
The
Jerry
app gives you the most accurate loan options without the hassle of speaking with individual lenders yourself. Using information from your current loan and credit, users are given a list of lenders to compare competitive quotes quickly and easily.MORE: How to refinance a car
View full answer
- Gregory R.
WHY YOU CAN TRUST JERRY
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.
Join 4M+ members in lowering their car insurance
You Might Also Be Interested
Read Advice From Car Experts At Jerry
What Others Are Asking
Browse More Content
Insurance for Your Car
Insurance in Your State
Easiest way to compare and buy car insurance
No long forms
No spam or unwanted phone calls
Quotes from top insurance companies
