Purchasing a car is a major milestone in anyone’s life. It’s one of the first major purchases you make that will set you back several thousand dollars, and chances are you’re probably going to be paying off that auto loan for a long time. However, no one likes the thought of having to pay back a large sum of money for their vehicle, which is why you need to be financially secure before you take out a serious loan. However, it’s almost always a necessity, and even if you’re secure with a job and a decent amount of income, it’s not a guarantee that you can pay off all of your outstanding credit cards and loans. 

So, to help you out of this predicament, we’ve gathered up some tips on how you can quickly pay off your car loan. These tips apply to both before and after you purchase your vehicle, so no matter what stage of your car loan you’re at (be it planning or several months into repayments) here’s how you can pay it off faster. 

Take an Interest in Your Repayments

If you learn more about your repayments, then you’ll learn how to pay it off faster. For instance, if you start skipping payments (something that some lenders offer you) then you’ll quickly build up higher interest rates. Unless you plan to skip a payment then pay back double the next time you have to pay, don’t skip payments. You should also take a look at your interest rates. Generally, the longer you leave your loan running the more interest you will be paying off. If you start paying instalments more frequently or making large deposits to pay off your credit, then you’ll have less to pay in the future which means your interest rates won’t go up.

If this all sounds like a bit too much work, then you may want to speak with a friend who’s a little better at managing money. Failing that, simply pay a bit extra each time you make a payment. Increasing your payments by an extra 10% or more can quickly add up over time, which could save you a lot of money that would have otherwise gone to interest. Even if all you do is round up your repayments to the nearest hundred, it will all help to pay off your loan quicker, and also incur less interest.

There’s a lot of focus on repayments when it comes to loans, so make sure you’re taking all these factors into consideration. Paying off your car loan faster will ultimately depend on how much time you’ve spent looking at your repayments and optimizing how much you can pay per month without impacting your lifestyle. The more you contribute, the less interest you pay and the faster you can pay off the debt, both of which are advantageous to you, but require some serious budgeting. If you aren’t very good at budgeting or struggle with it, then you may want to learn some basics before even taking on a car loan to help you pay for a vehicle. 

Reduce the Cost of Your Vehicle

A simple way to reduce the costs of your repayments and pay back earlier is to reduce the cost of your vehicle itself. There are several ways to do this, such as looking for an earlier model with fewer features or toning down the extras you buy. Shop around for a better deal and try to look for a vehicle that can fit your needs, but still be within or well below your budget.

A good place to look would be at a used car dealership. Most secondhand cars are well below their original retail value, and there’s always a possibility that you can find an older model of a vehicle. These are usually worth a lot less, but still pack quite a punch in terms of features and utility. This is perhaps one of the best ways to quickly pay off your car loan, but it only really applies to people who have yet to actually take a loan out. In short, the less you pay for your vehicle the less your car loan amount will be and the faster you can pay it off. Unless you absolutely need certain features in your car, then you can probably make some compromises and pay less for a vehicle.

Consider Refinancing Your Loan

An option that you’ll have if your credit rating is decent is to refinance your loan. Unless you have a terrible history of borrowing money and not paying back, most banks and lenders will allow you to refinance your loan. There are several reasons for doing this. For starters, it could lead to you paying less interest or you could try and renegotiate the terms so you pay more often. However, this option won’t make much sense if you end up wasting your time or more money. Only do this if you’re confident that it will lead to something positive. 

If you’re smart about refinancing and negotiating, you could potentially reduce your interest rates by a couple percent which can add up when you’re paying tens of thousands of dollars for a vehicle. In some cases, you may be able to negotiate a very low, or even a zero-percent, interest loan.

Make Extra Money

This is easier said than done, but it’s a sure way to pay off your loan faster. There are plenty of ways to earn some extra income, be it by selling your old and unwanted items or by having a second job. Depending on what method you pick, you may have to put in twice the effort in order to shorten your loan repayment time.

If you’re out of ideas, then this is perhaps the fastest way to ensure you pay off a loan quickly. Earning extra income will let you pay off your loan faster, which also results in paying less interest. You could commit your entire second paycheck or funds from selling your belongings to paying off your car loan. Even if it’s just a little bit, it adds up over time.


At Eden Autos, we work with you to find the best car loan rates, regardless of your credit history. To find out how much you qualify for, go to our Get Pre-Qualified Page.