OFF A CAR LOAN MORE QUICKLY
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.
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.
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.
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,
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