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Should I pay more toward my car loan each month?
I was thinking about paying more towards my car loan each month to get ahead. Are there any downsides to this? What are the upsides?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Like with any other type of financial move or planning, paying more toward your
car loan
each month has both pros and cons. Pros of paying more toward car loan each month
- Less interest paid over the life of the car loan
- Shaving time off your car loan
Cons of paying more toward car loan each month
- Fewer funds for emergencies
- Possibleprepayment penalties
- Stretching your budget
- Not paying down higher-interest debt
Again, you’ll have to compare which idea is better for you, but overall, paying more toward your car loan each month will save you hundreds and maybe even thousands of dollars if your budget allows.
Plus, paying off your loan early also saves money on car insurance. Instead of carrying full coverage as your lender requires, you can select whatever coverage you want once you own the car outright.
To help you save money on car insurance, try using the number-one-rated car insurance app,
Jerry
. Jerry compares personalized quotes from more than 50 top providers, including Nationwide, Allstate, and Travelers, and delivers the best deals to your phone in minutes for free. The average Jerry driver saves $879 a year on car insurance!View full answer
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