How to Pay Off a Car Loan Two Years Early

You can pay off a car loan quicker and cheaper than you think. And if you have a car loan that carries a high interest rate, your number one priority should be to pay it off as early as possible. Fortunately, it’s not difficult to do.

1. Determine how much money you need to increase the payments.

If you just start throwing money at the loan without a plan, it will certainly help you pay it off early. But if you do it methodically, the chances are much higher than you’ll actually carry out your plan and get the thing paid off fast. The first thing you need to know is how much to increase your payments by in order to pay off the loan in the time you want to do it.

There are a number of calculators on the web that help you determine this, but you can also use Excel to do the job. Just open Excel, look for the “Present Value” calculator and have at it. Let’s assume you do the calculations and determine that you need to increase your payments by $220 in order to retire the debt two years early.

At this point, your mission is clear. Get out there and save an additional $220 each month. The best way to find that money is to increase your income, cut your spending or do both. If you want to go the easy route, look through your spending and find a few ways to cut out the $220 you need to send to the lending company. Of course, this presupposes that you indeed track your spending. This is a crucial step towards financial independence, so if you aren’t tracking your spending, start doing so.

At this point you know how much you need to bump up your payments by and how you’re going to do it. All you need now is a commitment to “get ‘er done.” The best way I know how to do that is to make a commitment to another human being. You already know that I am a huge fan of having accountability partners. Tell your accountability partner exactly what you’re going to do, how you’re going to do it and when you’re going to do it by. Then check in with your partner every week or month just to keep yourself on track.

If you can’t come up with the extra cash, you might be able to reduce your interest rate by borrowing money elsewhere and paying off the high interest loan. But if at the end of the day you can’t execute your plan in two years, that’s OK. Let’s say in the above example, you are only able to come up with $100 extra to throw at that loan. That’s fine. You won’t get it paid off two years early but you will get it paid off much earlier than you originally planned. Perfection is the enemy of improvement. Don’t let progress evade you. Go for it.

Have you ever paid off a loan much faster than you thought you could? How did you do that? What is your best tip? If you are interested in other ways to pinch a few pennies make sure to read Pinyo’s post on the subject.

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Ronald Dodge says

One thing you did not address is the fact some loans also carry early payoff penalty charges if such loans should be paid off too early.

I had a loan for my van, which we about ended up having to take out in February 2007 after the prior van was totaled by a semi driver in September 2006. It was for $10,500 with an interest rate of 7.59% stated APR over a 5 year period. The BTBEAPR and ATBEAPR worked out to be 7.86%. At the time of this loan take out, our income was very tight

The one major catch to it, if we paid it off entirely at least 6 months earlier than the due date, we would get slapped with an additional $125.00 early pay off charge. As such, I had to plan how I was going to pay down this debt without getting slapped that additional charge.

As for my planner and accountability, I use my own created Excel financial file to hold me accountable. You may say that’s not a good way to hold one accountable. For me, it is cause I have done the various studies leading up to and through retirement years with the various financial aspect and risk factors. Given how things had worked out in life, I have found what I had put into the financial file to also be what has taken place in real life. Obviously, not everything in the file has taken place, but they are shaping out as I have put into the file based on the self studies I have done last decade.

In 2009, I did receive an inheritance, which greatly helped out with this significant goal, but I still had to be very careful with how I attacked the debt. By July 2009, I essentially paid off the debt, though technically it was not wiped out yet. There was only $18.51 left on the debt to make the interest charge negligible. By how I did the planning, I saved myself a tremendous amount of money from the interest. Take my monthly payment amount, multiply it by 5, and that’s about how much interest I saved myself. I used the cash flow management worksheet that was planned out for the next 2 calendar years every August/September to determine when I could make those extra payments. As a general rule, I planned the income on the conservative side when I did my 2 year planning, thus as I had extra income coming in such as from overtime, I also determined when I could make that next monthly payment.

This past August 22nd, I made that very last payment of about $22.00 and got rid of it entirely. paying an interest charge of $3.50 or so was far lower than paying that early payoff charge of $125.00.

In some ways, I did pay it off earlier than expected, but then that was only due to the inheritance I got from a good friend who was more like a big brother to me. As for the majority of that inheritance went to, part of it went into the emergency fund and part of it went to paying down the mortgage.

Given the debt was based on 100% simple interest rule, none of it based on the rule of 7/8 rule as I told them straight up, I refused to take any debt that is based on rule of 7/8 rule. That’s cause with rule of 7/8, any extra money you pay towards it, you get no credit for it at all other than a lowered principle amount. But as for the interest charge, you still get charged the interest based on the scheduled principle amount, not based on the actual principle amount. That’s my single biggest reason why I refused to take out a 7/8 rule debt.

As for mortgages, they generally are a hybrid of rule of 7/8 and simple interest. The rule of 7/8 part is based on the fact, regardless of what date you actually pay the extra amount, it’s assumed to be paid as of the payment due date the regular monthly payment is due on. The simple interest rule part, it does lower the interest charge unlike the rule of 7/8 as it’s based on current principle amount, not based on scheduled principle amount.

Now that the MIP is gotten rid of (I accomplished that in October of this year), the next thing to focus on will be to work on building the emergency fund back up. However, that may not be happening until I get employed on a full time basis or find some other work (self employment).

Currently, I am going to college full time while on unemployment and I look to be finishing this quarter with a GPA of about 3.5 for 18 credit hours, which the last time I was in school has been 15 years. I essentially built up 246 quarter hours worth of high education in Accounting in the early 1&90’s. Yet, the first 93 quarter hours got vaporized by the first school going belly up and the state board has no record of it. Xavier University (Ohio) didn’t accept any of those credits either, so I ended up having to repeat so much stuff learning practically nothing new given I already had it in high school at the Genesee Area Skill Center (GASC) in Flint, MI and at the first college. The 246 quarter hours doesn’t even count the time at GASC since the time at GASC was in high school.

This time around, Xavier University (Ohio) would have required me to start from scratch all over again, and I’m like, no way. As such, I’m going to University of Cincinnati, which currently looks like I will be required to take up about 75 quarter hours more that include the current 18 hours. As such, I will have built up about 321 quarter hours just for that 4 year Accounting degree. That’s almost doubled of what a 4 year degree should only require.

The unemployment office want me to go to some local community college to get the degree, but after what happened to my credits and Associates Degree in Accounting with a GPA of 3.87 from Cincinnati Metropolitan College, I’m like, No way. I am not risking my stuff to the financial health of those colleges only to lose that too. While no college is immune to going belly up, some are a lot less likely to happen to than others.

In some regards, I’m not sure how I managed to make it this long having only pulled about $400 from the emergency fund, which the emergency fund already recovered that amount, but here’s the things my wife and I have done:

My wife working nights, which has helped with the bills. Her income alone wouldn’t do it, but with her income, it does help.

My unemployment income does help, but that by itself wouldn’t cover the bills either.

We got our settlement money back in the month of September given it’s been 5 years now. That is expected to help last us into the month of January, which then I will have other funds to get us through the rest of January and into February until we get our tax refund from Additional Child Tax Credit and most likely also from the Earned Income Tax Credit (this will be my first time ever to be able to claim that). That money will help fund the ROTH IRAs (the amount needed to max out the retirement saver’s credit). The rest of it should last us at least through the month of June. Hopefully, by that time, I will have found something.

Every step of the way, I use this cash flow management worksheet. Of all the worksheets I have in the file, this is the one worksheet I use quite extensively.

As for 2 of my worksheets, they have on them dealing with networth values for the household. One is the balance sheet and the other measures progress. This year, our networth value is taking a beating by way of increased debt overall (student loans), long-term assets depreciation (this would have happened, even if we were bringing in sufficient income), and lack of sufficient earned income.

I could have said not to go to college cause of having to take debt out to go to college, but then again, I wouldn’t get the chance to make at least $70,000 annually after I get that 4 year degree and could very well be stuck with $30k-$40k annual income, which that won’t suffice. This is based on the IRS’s auditor’s job that would only pay $41k annually without the degree vs $71k with the degree. Not only that, but to keep doing the same thing expecting a different result is insanity.


Lending Club Borrowers Are Paying Off Really Early – And There’s Something Weird About It

Prosper loans early payoffThis week I surpassed more than 500 lifetime early note payoffs on Lending Club. Considering that loans on the platform are either for a fixed term of 36 months or 60 months, I was quite surprised to see that the average early payoff was happening just 10 months in. My portfolio is too young for even the first loans I ever bought to have reached maturity so the data isn’t entirely statistically relevant. But to put what I’ve experienced so far in perspective, out of every note I’ve ever bought on this platform up to and including today, 17% of them have already paid back early in full.

One borrower paid back their 3-year loan in just 8 days!

Of the 145 5-year notes I bought just 20 months ago in May 2014, 36% of them have already paid back in full. This is astounding, but apparently old news. A PeerCube analysis conducted two years ago revealed that 80.6% of all fully paid loans were pre-paid in full before reaching maturity.

At face value, these statistics could be used to boost investor confidence. The loans are so affordable that just look at how many people are paying off early! But according to Anil Gupta at PeerCube, these borrowers might not be paying these loans off at all. Lending Club might be refinancing the loans with a new loan, which cashes out the original investors early in the process. As said in his analysis:

A PeerCube user who is also a borrower on Lending Club mentioned that he has been receiving requests from Lending Club to refinance his loan. Such offers are very attractive to borrowers whose FICO score may have gone up since taking the first loan. In this case, the second loan may come with lower interest rate due to improved credit score. Moreover, there is no deterrent in the form of pre-payment penalty for borrowers to refinance the loan. Lending Club benefits from a borrower refinancing an existing loan by charging additional origination fee from the second loan, i.e. more revenue.

Lending Club’s website says that to be eligible for a second loan, borrowers have to have made 12 months of successful, on-time payments on their existing Lending Club loan. “Sometimes,” however, they “identify customers who are eligible for an additional loan before those 12 months and ask them to apply.” That’s the policy for having two active loans at once, not for refinances specifically.

Lending Club’s quarterly earnings reports make no clear mention of repeat borrowers and there’s no way for an investor to know if the debt consolidation loans they’re taking risks in are really just refinances of existing Lending Club loans. But even if they were, that wouldn’t necessarily make them a bad thing.

Would you rather invest in a borrower who has already proved 12 months of positive payment history OR somebody brand new? But then again, would you rather invest in a refinance of a loan that was originally taken to refinance a credit card?

There’s a downside to loans being paid off early. If an equal reinvestment opportunity does not exist to immediately replace the paid off loan, then the investor loses. If they are no longer reinvesting anyway, then an early payoff deprives the investor of the interest to offset future chargeoffs from the remaining loans that will go bad. And worse yet, investors are forced to pay a penalty to Lending Club for any loan that pays offs early after the first 12 months in the form of a 1% fee on all outstanding principal. Seriously, investors are penalized for early payoffs for which they have no control over and are not allowed to know why or how the borrower paid off earlier.

Sounds very weird to me…

Last modified: October 10, 2016 Prosper loans early payoff

Sean Murray is the founder of deBanked , an 11-year veteran of the merchant cash advance industry, a casual Lending Club and Prosper note investor, the co-founder of Daily Funder, an alternative lending speaker, consultant, writer, and enthusiast. Connect with me on LinkedIn or follow me on twitter.


Pros and Cons of Paying Off Your Student Loans Early

Prosper loans early payoff

While paying off your student loans early seems like a no-brainer, it might not always be the best financial decision. In some cases, it could make better sense to put your money to work elsewhere.

Here are some of the pros and cons to paying off your student loans early, and some tips on how to pay them off.

Paying off your student loans in full will also free up your monthly cash flow. If you make just the minimum payments in the example above, you’d be required to pay $116.11 per month for 120 months. By paying off the balance in full, you’ll have $116.11 more in your pocket each month—money that can then be invested for retirement or used to pay off other debt.

You would also lower your debt-to-income ratio, which is the percentage of your monthly income that goes towards paying debt. This makes it more likely that a lender will approve you for a mortgage. Lenders typically want a debt-to-income ratio of less than 36 percent, according to Zillow.

Even if you can’t pay off your student loans in full, adding just a little extra money to your payments each month can still make sense. For example, if you can add another $100 per month to your payments, for a total of $216.11 per month, you would pay off the loan in just over four and a half years. You’ll wind up paying $1,689 in interest--$2,243.94 less than if you made just the minimum payment each month.

Another great reason for paying off your student loans early is for the peace of mind. Getting rid of the debt once and for all means one less burden you’ll have to carry, and you can focus on investing for retirement or saving for a house.

Student loan debt is referred to as installment debt, which means you have fixed payments for a specific period of time. The influence it has on your credit score is less than revolving debt, such as credit cards. For this reason, paying off your credit cards first will have more of a positive impact on your credit score. However, you should make sure you don’t miss any student loan payments, as this can negatively affect your credit score.

The interest you pay on your student loans is tax deductible, so if you pay off your student loans in full, you will miss out on this tax advantage. However, the amount you can deduct each year in interest is the lesser of $2,500 or the amount of interest you actually paid, according to the Internal Revenue Service. Therefore, holding onto your student loans just for this small tax break might not be the best idea.

Paying off your student loans in full is also not recommended if it means draining your savings account or emergency fund. You should still have cash set aside in case of an emergency.

If the interest rate you pay on your student loans is low, it might make more sense for you to invest the money instead, but remember that investing involves risk and that you also have to factor in commissions, fees and taxes you’ll pay on investment gains.

Best way to pay off your student loans early

First, you should understand exactly how much you owe and at what interest rate. You should categorize all of your debt from the highest to the lowest rate, and work towards paying off the higher rate debt first.

It’s also important to find out whether your student loans are private or federal. If you have private student loans, you should understand that these loans tend to come with variable interest rates, instead of a fixed rate. With the possibility that interest rates could rise in years to come, student loan payments would increase as well.

Therefore, it’s better to have a fixed-rate loan because you’ll always have the exact same payment each month. For this reason, it could be a smart move to pay off your private student loans before your federal loans, even if the interest rate is lower.

If you can’t afford to pay off the loans in full, you might want to consider consolidating the debt into one loan. This makes sense if the loan you get has a lower interest rate than your current rate. You’ll combine all of your student loan debt payments into one simple monthly payment, making it easier to keep track of your debt.

Even if you can’t pay off your student loan debt in full or consolidate the debt to a lower rate, you can still try to make more than the minimum payment each month to save on interests and shorten the length of your repayment period.

Steve Nicastro is a staff writer at NerdWallet, a website dedicated to helping consumers save money and make smarter financial decisions.


6 Ways to Pay Off Your Car Loan Early

About seven out of 10 people borrow money to buy their cars, and a car loan is one of the largest financial obligations you can have.

If you’re one of them, you may have a loan that will take you 60 or 72 months to pay off. That’s five to six years! That’s too much interest to have to pay. So we want to help you get out from under that loan faster and save money on interest by giving you 6 ways to pay off your car loan early.

How to Pay Off Your Car Loan Early

1. Pay half your monthly payment every two weeks

This may seem like a wash, but if your lender will let you do it, you should. With a payment every two weeks, you’ll end up making 26 half-payments per year. That adds up to 13 full payments a year, rather than 12.

If you have a 60-month, $10,000 loan, you’ll save only about $35 in interest, but you’ll repay the loan in 54 months rather than 60. That’s six months of your life back and can be an easier transition if you get paid every two weeks.

Instead of just paying what is recommended, round your payments up to the nearest $50 to help repay your car loan more quickly.

Say you borrowed $10,000 at a 10% interest rate for 60 months, then your monthly payment is $212.47. With that payment, you’ll repay your car loan in 60 months, having paid $2,748.23 in interest.

However, if you decide to round up and pay $250 a month, you’ll repay your car loan in 47 months, having paid only $2,214.69 in interest — saving you $533.54!

3. Make one large extra payment per year

This is the one-time version of rounding up. But it doesn’t matter when you do it.

Let’s say you borrow that same $10,000 over 60 months at 10% interest. If you make an extra payment of $500 a year, you will repay the loan in 49 months, having paid $2,279.35 in interest — a savings of $468.88 in interest.

4. Make at least one large payment over the term of the loan

And the savings just continue. By making at least one, larger additional payment a year, you’ll save even more in interest. Just remember, the earlier you make your big payment the sooner you’ll pay off your car loan. The early bird gets the savings, or however it goes.

Some lenders will let you skip your payment once or even twice a year. Resist the temptation. Skipping payments will lengthen the term of your loan and cost you more in interest.

This is where you take your loan and negotiate a new monthly payment and pay-off date. Only do this if it gets you a lower monthly payment and/or a sooner pay-off date (re: term).

Otherwise, refinancing makes little sense. You don’t want to lower your monthly payment and lengthen the term of your loan because you’ll end up paying the same principal and a lot more interest.

Even if the outstanding balance of your car loan is large, it’s unlikely to be your loan with the highest interest rate. That honor tends to go to credit cards, the average rate of which is about three times higher than the average auto loan interest rate.

Think about focusing on paying off your credit cards before focusing on your car loan to save the most money and raise your credit score.

But if you’re focusing on your car loan, we hope this has helped you create a winning strategy toward becoming debt-free and even keep a few extra dollars in your pocket as you pay off your car loan early!

Participation Pays Off: Are you using a strategy to pay off your car loan early, or will you be using any of the ideas we’ve listed here?

175 Responses to 6 Ways to Pay Off Your Car Loan Early

What is more recommended for me I have loan at 22000 n interes is 25% payment are 590 what do do make small extra payment over months or give big payment every month or every two months

I am pretty good at finances. I would bring your credit score up and refinance. Your rate is astronomically high. Shoot for a 6% percent or lower rate once your credit goes up. Check out author Dave Ramsey to help you out more. Your finances will be all the better for it.

I have a car loan for 6,445 with mo. Payments of 170.00, but I’m paying 200.00. interest rate of 18%. I am looking into building my credit. Should I refinance? If so, after how many months? I have the car loan for 5 years of course, I intend to pay it off sooner. If I pay it off sooner will this bring my credit score up??

Normally you’d wait a full year of making on-time payments then pull your own credit report to see where your credit standing is. If your FICO core is not higher then mid 600’s then typically you’d wait another 6 months or so to see if you could bring it up some more. Remember the higher your credit score the more worthy and less of a risk you appear to financial institutions prompting them to offer you better loans with low interest rates.

After 6 months of having the car loan, refinance. Going to a credit union will help you more than a regular bank. You need to get that interest down and be in between 3.9%-6%. When I saw you were at 18%, you are paying triple of what you should making your car payment double. WOW.

I have a loan of 12,227.- with a rate of 2.42. Monthly pymts for 36 months is 339.65. How much can I pay, without doubling monthly pymts, to pay off loan early?

I have a 15,879 loan with interest rate of 5% monthly payment is $257, if I pay half of $300 biweekly would that be twice as effective? I’m assuming so, but wondering what’s the best possible way to know this out…

*knock this out…lol not know.

I have monthly payment of car and even if i made early payments, i just noticed that the principal amount paid is like $70 and my interest paid is about $340. How much interest i am paying every month and principal paid only like that?

How to calculate my interest? Everytime i pay monthly it goes big like double to interest that the principal. I am thinking to refinance my car, but i don’t know how. I need your help. thanks

Make sure you call and tell them that you want the extra $343.00 to go directly to the PRINCIPAL, not as an extra payment!!

Every single penny you pay extra, make sure it goes to the PRINCIPAL AMOUNT DUE, not as a pre-payment.

My name is Steve I have a car loan on my car for 3600.I pay 400.00 a month this is very expensive for me I need someone to help me pay less on my account can someone help me please

I need your help. I currently owe $15439.00 with a 19.49% interest rate on my car I have to pay it off within 48 months. I’ve been looking into ways on how to pay my auto loan off sooner. So, now I’m making weekly payments at $106.21. I would like to make a large down payment but I’m trying to figure out first is it worth it? Also, do you have any other recommendations for me.

Just follow these easy steps.

Paying your car payment on the due date pretty much, half goes to interest and half to principal. Paying after the due date will cause your payment to go more into interest and less to principal. Pay your car payment as soon as you receive your statement via e-statement or through the mail (around 10 to 15 days earlier) Watch and see how your principal starts going down and you will end up paying your loan a lot faster. No matter how high your interest rate is. It is always a good idea to refinance when ever you can to get a lower interest rate.

Its that simple.

Interest rate of 19.49 is astronomically high, don’t miss payments for 6months, see if your credit score improves and then refinance! Get out of that loan as quickly as you can or else most of your payments goes to interest. and trust me that is the kind of customer they want you to be

Hey are u stilll on here Ima need ur help

Based on the information you provided. You are being charged $147.50 each month in interest. (Multiply your monthly payment by your interest rate 590*.25= 147.50). If you pay the $590+$147.50= $737.50 each month. You could have your car paid off in 2.5 years. $737.50* 12= $8,850.00 in payments for that year. If you divide your unpaid principal balance of $22,000 / $8,850= 2.5 years (rounded of course). Just a suggestion.

I never knew this! Best advice ever!

Hello, my name is Christina and I got a car for 22,000 and my interest rate is 18% I pay 520 what do I do I’ve had it for a year and I’m down from 22000 to 21000

If you have not missed payments, look to refinance, you can often try with your current lender as they would rather keep you than lose you to another lender who would profit. If that is not an option, look to sell and get an older model for a good price. Ultimately you must think would I rather be new and broke, or a little older and richer.

Simply put, you have a car that you can’t afford. Refinance this loan at a rate not more than 6% or sell the car. There is no other way out of this. You have a wicked rate! If you paid 520 for a year and that brought you from 22000 to 21000 it means you paid 520*12=6240 that year and 5240 went to interest while only 1000 went to paying off your car. AT this rate you would have paid more than double for the car by the time you are done. Summarily – get out of this and do it now!

wow… best advice ever!

So Maxine…. should i apply that additional money to the principal balance or just pay the additional money…. eg. My car payment is 450.00 for 30 months interest rate is .25…. your thoughts

I have been paying $325 on my car loan as the payment is $297.98. I calculated that’s about $3900 a year. The loan is for 5 years.

Thank you. I was wondering about how this very “process” (payment plus interest rate) could help me. Thank you for explaining how this works.

I have a loan of 20,000 I pay 520 and my interest rate is 18% what do I do?

I hope you refinanced. If you never missed a payment, you can shop around for lenders to refinance with and get a way lower interest rate. Lower interest rate + same loan term would equal a month lower monthly payment for you.

Sell that car quick you will be paying double for the car

This is very good advice….

I got 10000 left on my car, If I pay them all at once, do I have to pay the interest too, or that gonna be all I have to pay 10000? Thanks for your help

I suggest to get a payoff amount from the loan company. That should tell you how much interest would be paid.

Hi! so I have foolishly financed a car from a dealership, when I was already financing one & the trade in only covered $10,000 of a $19,000 loan, so with that being said that 9,000 rolled over to my new loan. I’ve had the car for 1 year & 6 months. My interest is 5% and I’m paying 508$, I’ve tried to refinance through my credit union but they said I’m maxed on the years & that’s the lowest interest they offer. I eventually want to lease a car….but I’m stuck?! HELP!

OMG, you are a genius! With this strategy, I will get mine paid off in 2.29 years instead of 4.25! Thank you.

If you can pay sooner the better as you will pay in interest as long as there is no penalty. If you have an fees, penalties, etc then you need to calculate those in and you may need to pay a large payment. If you can pay however much however often then earlier is usually better as you are not paying as much interest. 25% is very high. I would see if you could refinance or have it reduced.

Ruby,your interest rate is insane. The best thing to do is to try to get this loan payed off ASAP. I would start by making a payment every week, if you split your current payment into weeks, your currently paying $136.15 a week, increase this to $150.00 a week, just $13.85 more a week, and by the end of a year you will have paid $720 more towards your loan. Also look for other loans with lower interest rates to hopefully pay at least half your loan at say 10% interest rate. Good luck and don’t be late on your payments.

I have the same situation. 72 months, 385 a month, and 25%. I’m gonna make large payments each year towarxs yhe principal. My goal is to knock out my car in 3 years. Got the car in june of this year.

I went and got a car that sale price was 12,000..my payments are 350 a month and the term is 5 years..I’m almost paying double for the car..somebody please help me

Sell it, 25% Holly Molly you a paying for that car twice. Tikes

Why would you get a car at a higher interest rate then a credit card. Shut get a cheaper car… build your credit and get a more expensive car later. Do you know your per diem atm? Half of your car note is going to interest

Hi there – I have a similar question to Ruby. I have a 72-month auto-loan of $24,000 and interest rate of 18.5%. I’ll be in a financial situation to pay off 50% of the loan next month (on month 2 of the loan) and the rest of the loan within another 3 months. I have absolutely terrible credit from health issues three years ago but I make really good income. My primary goal is to not lose money on interest but I also want to build credit. Given that my interest rate is so high, would it be smarter to pay off the loan as quick is possible? Or pay off 75% and then make payments on time on the rest to build credit? Would appreciate your advice.

In my opinion, I’d go with whichever is more important to you. You never know when another issue will arise and ruin your credit even more. Don’t run the risk. Pay off the 75%, put the other money in savings for an emergency fund and pay the rest off a little at a time. This way you are still building your credit, saving on interest and preparing for an issue that might arise.

I agree mostly, save at least 1k for emergency. Pay off what you can as fast as possible. Then save those payments you would have made for the rest of the term. Ex.$300/month 3 years is $10,800 you have saved for your next purchase,plus possible trade in, you could buy a newer used vehicle for that. Credit is great but, it just means you handle debt well. Better to realize what your needs are and plan for them, pay them out right, then save for your next need. Needing credit is just a myth, you can actually get along quite well without it, if you plan accordingly. You really just have to think do I need it now or want it now. If you need it,and you planned well you should be able to afford it.

The best and fastest way to build credit is go get a revolving account. Like a jewelry store. I manage a jewelry store and it is absolutely amazing how fast u will see it go up. And any store by stwrling or signet jewelers like kays or jareds are not very strict at all as they do there own financing. And they report to all 3 bureaus so it will raise your median score as well.

Great advice really learning alot…. Thank you for the great ideàs…

Look into Dave Rasmey on iheart radio. An also if your really trying to get out of debit ready his total money makeout book. An take his financial peace clasd

I think you mean his Total Money Makeover book vice Total Money Makeout. lol!

I just wanted to let you know I decided to take an extended loan at 75 months to allow myself some buffer room for any possible pitfalls. I decided however I would be doing a combination of both bi-weekly payments and the round-up method.

When I did the math this means my 38k loan is paid in full in just under 5 years. I very well could’ve taken the lower interest rate and committed to higher payments but I feel like the extra wiggle room was a better option up front.

This is solid advice your giving here.

Hi I have an 72 month car loan at 3.49% intrest rate, My monthly payment is 328.76, I’ve been rounding up and making a monthly payment for $400. Is good? I’m asking because my Jan 2016 statement showed more of the over payment applied to the principal less interest fast forward my March statement shows more of my over payment being applied to the intrest please help I have decent/good credit and really want to pay this loan off early

Hi shakira, I was just reading the blog and the #1 most important part of info that would make this advice actually work correctly (which was not stated in the blog) is that you will need to request an amortization schedule from your lender every month. I would advise you to ask your lender “when is your loan recalculated?” That way you can request it immediately after they recalculate the new balance. So when ever you pay extra money you will be paying the “exact” amount towards the principal that is being requested by your lender for that following month. The A.S is an outline that your lender follows that will inform them on how much they will charge you monthly on principal and interest. You can’t just pay any amount you want, because it won’t fully count as a prepayment towards principal… It has to be the “EXACT” amount that is due for the principal. You should only do this month to month, because every time you make an “exact” principle payment in advance, you’re amortization schedule recalculates and the interest for that month has been eliminated. So your p to i payments will be different every time. Every time you make an exact payment in advance you will be paying your loan off a month faster and saving more money that would have been eaten up by interest payments. So if you follow this advice a 5yr loan could be paid off in 2.5yrs. You can also use this on your mortgage, that’s where this technique originated.

Hi I pay $483 month with 5% with 72 months $20,000

How can I pay off early?

You need to specify that the extra is to go towards principal. Otherwise the lender will just apply it towards the next months payment and any subsequent payments will be applied to future months.

i brought my first car about 6 months ago. I was so exited and i never understood the whole loan financing. Now reality has kicked in and i don’t know what to do. The car was worth $13,500, the dealer told me i have to do financing to which i stupidly agreed on. I paid 5000 cash and making about 300 a month payments, i mad eon big payment of $2000 , it’s been almost 6 months and i do not like the idea of owing someone money. I am thinking of paying it off and be done. What can i do? the last time i asked for settlement , the financing companies said

8000, which seems too excessive. The car that cost 13500 now will end up costing over 17000. What should i do? Should i pay off the 8000? i just can’t enjoy the car anymore because of it. I just feel the dealer duped me.

In my opinion your doing great. My opinion. You have to also remember the longer you carry the note the more it affects your credit report and score. If you pay off to quick it will not show you can make monthly payments to future creditors. Like a home. No matter what when you took out the loan the interest was primarily already charged. You have already saved money by paying the additional towards the value. Why strain or stress. Increase your monthly payment and continue. To grow your credit score.

Congrats on the new car. I recently bought my second brsnd new car a month ago.I read ur post and yes interest is no fun

But looking at the numbers u said u didn’t get duped. The salesman doesn’t make his money on interest. He gets his money on how much he doesn’t let u talk him down. On new cars there is an additional dealer mark-up. If u talk him down to or past that. The salesman gets the flat for that car. Most salesmam want to put u in a used car because there make 5x the money. But anyway back to the subject, I have seen people get a lot worse interst rate than what u got. Ur actually in not to bad of shape. Just pay extra toward the principle every month and u will see a big drop in principle and interest. Thsts what im doing. I got a six year loan bit there is no way I will ever pay om It thst long. But its good to have lower payments on the months that are right

Thats what I do get lower payments then pay it off in half the time.

I owe about $4700 more on my car I pay right at $50 a week on my car note. I would like to save on the interest can you suggest the best way for me to pay my car off?

To save on interest you must pay more per month. You also want to make sure you are making it the principal not early interest. Just let your loan place know you want to pay an extra amount towards principal balance.

I have a car loan with a 12% interest.

I went to the credit union to get it refinanced and they told me I was $5,000 dollars upside down. How do I get rid of this so I can get refinanced.

I have a 6 year 72 month $19,000 truck loan at 6% interest what do you recommend for me? The payment is right around $319 a month

Pay $350 min. Make sure bank knows you want extra applied to principal balance. Most important about paying more is you pay off early and save some interest.

Great list of tips. Any way to pay some extra money toward your loan without breaking the bank is the best way to go. Using the “round up to next $50” method sounds like a good way to make a noticeable impact on your loan after some time, especially if you combine it with one of the other methods.

I have a question. Am selling my car for 950.00 it has a title loan on it. With the money am getting am paying it off through loan max. Can i then switch title in the new owners name and i owe 734 but will i pay extra to pay it off or will i have to pay the 734.00

Hello, I currently just got myself a used vehicle for the first time ever and I’m really trying to understand how and what’s the best way to pay it off. I did not have the best credit and was surprised that I was even able to get one in my name. I have 70 months of 442.71 payments and I make payments every two weeks. Can anyone help me on the best way to pay this off to where most my payments are not going straight to finance charges. Also possibly when a good time to refinance the vehical. I’ve slowly been bringing my credit score up and heard I’d be able to do this, just don’t know when a good time to do so would benefit me.

My payment is 533.00 for 72 months it’s a 6.9 interest rate. What’s the best. Strategy for my loan?

Note a 7% interest rate or lower is a pretty good rate on a car. Only way to get better than that from what I’ve seen, generally is to refinance your home to buy your car and at this point you will have a rate of 3-6% on a refinance loan.

You have are out the loan. Instantly you are charged your first years APR.

$10,000 loan your rate at 7%(.07). 10,000x.07= 700$ for the first year just in interest. Considering the ampunt you have loaned this is a good rate. Then you take the $700 divide by 12 months. = $58.34 of your monthly payment is interest only. So if your payment is $258.34 per month your only paying $200 towards principal balance. $200 x12= $2400. Now second year is here. You paid your interest and principal for the year. It’s time for APR again. Your new balance is $10,000-$2,400= 7,600 now again…. 7%interest. – $7,600x.07= $532 divided by 12= $44.34 per month. Your payment is $258.34 -44.34= 214 being paid to principal balance. 214 x12= $2,568 paid for the year to principal. Now 3rd year. $7,600 -$2,568= $5,032 interest 7% = $352.24 divide 12 months= 29.36 monthly interest. 258.34 monthly payment – $29.36 in interest= 228.98 going to principal. For 12 months. = $2747.76 paid to principal. Now you are 4 th year. You now owe $5,032-2,747.76= $2,284.24 X.07 interest $159.90 in interest for the year. Now you consider current payment and amount due. Ok I owe 2284.24+ $159.90 = 2,44.14 divided by my payment amount of 258.34= 9 and half month left till pay off.

This loan took apx. 46 months to pay off. My interest all together at 7% was $1,744.14 for almost a 5 year loan. $1,744.14 Divided by 46 months = 37.91 monthly average interest charge. So to pay this loan off faster and save some on interest you want to pay a min. Of an extra $40 per month. (Note:$40×12 is $480)

Paying an extra $480 into principal a year at a 7% rate only saves you $33.60 per year. Apx. The biggest bennifit is you will pay this loan off apx. 1 year sooner.

This really makes a bigger difference when your interest rate is 9.99-35.99 or payday loans that are up to 200+% interest rate. If I got a loan for less than 7% I myself would just pay till it was done. The bennifits toward my credit outway the interest rate.

Making payments monthly for an extended time betters your credit score. If you have Kredit Karma note the section that says on time payments (1-2) (2-4) (5-6) (7-8) (9+) to get a good credit rating on payment history you need to be making payments for 7-8 years on time. Homes obviously do this best on this15-30 year loan. However if you get a lowere rate car loan the difference is almost like paying to better your score by making them payments every month.

Hope this helps.

OMG, that explanation was awesome. Thank you.

I have a car loan valued at 11,768.00. I put a nice down payment on the vehicle, that’s why the total is low. My interest rate is 2.480% for 48 months and my monthly payment is set at $258.05. My question is, if I pay double the payment a month ( EX: pay 258.05 every two weeks per say) how much quicker will the loan be paid for. I made an amortization schedule and if I make the normal payments, the vehicle will be paid for in April of 2020. With a total of $605.49 paid in interest. Also, what would I tell the bank so that my payments be deduced properly towards the principle of the loan etc.?

What i normally do is for instance, i just got my wife a 2014 infiniti Qx60. The bank loan was $35,000 with an interest rate of 2.35%. my monthly payment is $523 with a 72 months term. Now my reason for this is so that i can pay the lowest possible car note while adding a lot to make it seem like it is actually a 24months to 36 months loan. Basically my payment is $523 but i pay $1904. the reason for this is while it is always good to want to pay off your car asap, life is a risk and if you ever hit A BLOCK i.e loss of job etc you can go back to paying your $523 vs the $1904 which will remove a lot of burden. but imagine if you had to pay $1904 every month. anyway it works for me in the sense that i can pay as much but also have the cushion to pay less

I have a 6 year 72 month $19,184 ON USED CAR at 5.65% interest what do you recommend for me? The payment is right around $315 a month

I WANNA SAVE SOME ON MONEY AND PAID OFF A LITTLE EARLY.

I just financed a vehicle for $18,045.00. The rate is 4.64% at 72 months. Though my monthly payment is $288.17, I plan on making a payment of $1,000.00 as my first initial payment and every month there after $538.17. This should cut my contract in half, right ?

Question. I owe $15,508 on my 2012 car. I pay $407 a month and have the loan until late 2019. I’m upside down about $5000. Carmax offered me $10,000 for it and I was going to use my tax return to cover the rest and sell the car and owe nothing. I’d then drive a family car that isn’t being used. Is this smart?

Question. I owe 24800 on my 2015 Honda. I pay 400 a month but the car payment is 398.00, it’s a 72 months contract and the rate is 1.9. How can I lower the payments and still have a low rate? .

I owe 13,308 with 65 payments remaining at 9.99% I’ve been paying an extra $20 a month. Every month I get a bill with the extra money I’ve been paying deducted from my next payment. My payment is $260 I’ve paid $280 sometimes $300 and my bill is down to almost nothing. Why is that happening, shouldn’t my extra payments go towards my principle and interest as opposed to lowering my bill? Is there a way for me to fix this? I’m with Wells Fargo. Is that just how they do things

I had the samw with a ranger..keep paying bat least the normal payment..thenshould be paying less apr and more principal..i keep doing itni got ahead real quick then when traded it in i wasnt upside down as bad

You need to tell them to apply it to your principal if you don’t tell them that is what they will do or put it on the interest. I have wells also

I have a loan of 22,000 with monthly payments of $499 so which I have paid now for 12 months. My problem is when I look at my statement it still shows that my bal is 20,000. I paid almost 4000 already so why is the bal still @ 20,000. Imw so confused and feel like I can’t do this, somebody please help me understand what’s going on.

Because you pay interest and the majority of it will be paid up front. You usually only pay a small amount of the$499 towards the principal and the rest is interest. This way even if you pay off the loan early or default, they still get their money!

Debt snowball method using EveryDollar budget (Dave Ramsey). My wife and I have been debt snowballing and we almost have the last credit card paid for (we only had two and they aren’t big). We will be paying my car loan off after the a personal loan is snowballed next. This is great motivation (paying off smaller debt and increasing it every time for the bigger debts). Once the car loan is paid off, the student loans come into the snowball. Great method!

Debt snowball is not usually smart. Might be good to make you feel better but not smart financially. Debt snowball requires you pay the lowest debt first. Not smart if the interest on your debt differs.

The best approach to paying off debt it to reduce the amount of interest being paid but keep the payments the same. Reducing the amount of interest being paid increases the amount of principal being paid.

For example, say you have one debt of $10,000 with an interest rate of 17 percent and one debt of $5,000 with an interest rate of 5 percent. Ramsey’s debt snowball would have you pay off the $5,000 first. Not smart. Better to concentrate of the $10,000. This will reduce the amount of interest being paid which, if you keep the total payment the same, will pay off all debt quicker.

Yes and no. One you have to account the will power into play as paying off one loan vs having 2 5k loans can be demoralising. Two paying off the 5k loan allows you to use that money to pay off the second. While you may(didn’t do the math here) pay more interest, you get out of debt sooner than if you do it your way.

The reality is, do you want to be out of debt or save $100?

I have just purchased a car. Because of credit score, I was not financed through a bank. I knew that I could pay extra each month so I didn’t mind the higher interest rate. I have just spoken with the company I was financed through and they informed me that they do not accept principal payments which I was not informed of when purchasing. What is the best thing to do to avoid as much interest and pay off the car early?

Hello, I need some advice. Just got a car loan. The banks says i owe $15000, after me paying $8000 for a challenger. My interest rate is high 15.3% since it’s my first time buying a car. My monthly payments are $322. And they gave me a 72 month plan to pay for it. I really don’t want to pay that much in interest… i want to know whats best. If i double the payments per month, or i want to give $1000 each month to pay it sooner. I’m not sure whats the best thing to do. Thanks in advance

This seems shady… Did you pay $8k for the car? And have you been making the minimum payments?

If yes to all of these, they should be giving you a payoff of $8k minus principle paid plus interest accrued for the month.

Idk how you can owe MORE than $8k unless it was a shady loan.

My husband and I are looking to trade in a vehicle we owe $20,000 on and downgrading for a lower car payment. We’re doing this because we have a daughter starting college. The loan has a 3.9% interest rate.

Our credit took a recent hit due to medical bills we are not able to pay off as quickly as the hospital would like. We now are looking at an 11% interest rate if we do the car deal. Our car payment will only be reduced by $85/month.

Does this seem woth it?

I have a new loan of 72 months with an interest rate of 15.88% with current payments of $403.29. I want to pay this loan off in 3 years 4 tops and I want to start paying bi weekly so the the question is how much do I have to pay biweekly to tackle paying off the loan in 3to 4 years . Your assistance will be greatly appreciated.

When you start a loan, all you are paying is interest, nothing toward principal. So any large principal payments need to be made at the beginning of the loan. I had $3000 as a down payment. Instead, decided only to give $500 down. Then once I had the loan, I made a principal payment of $2500 right away. Then add an extra $100 each month. It is shocking how much I have saved off the life of the loan. Started with $671 month payment, after 3 months, payment now if $430 month.5.5% to 2.3%. Just a suggestion if you have this option.

I just the other day purchase a car and my loan is for $74,000 with a 4.2% interest rate and a 60 month term. My payments are $1437 a month. I’d love to know the best option for me to pay my loan. My first payment will be in mid June. I’d like to pay it off faster but more importantly save money on the interest etc. Thoughts?

my car loan is 14000 monthly payments of 449.16 and term is 50 month how can i cut interest and pay off my car faster

I just purchased a used 2015 Toyota corolla S through a capital 1 loan in which the APR is 14.37%. My monthly payment is $401.78 within 75 months. my car loan is $19695.50. How to cut interest and pay off my car sooner?

Hello, I recently financed a car for $24000 with a 11.95% interest rate. I want to pay this as soon and easily as possible my payment is $478 but I’m not exactly sure how I can please help me I need to figure out how much interest I’m actually paying and what’s better to pay principal or interest ??

I have an auto loan 37000 with 7.4% on interest. I think my my payment 739.63 monthly in 60 months. I was make my first payment 800 which extra my min payment but the money goes to $272 to interest and $528 to principle loan. But the second month I pay min payment i see the money split $202 to the interest and $536 to the principal loan. Why when I pay more money going more to the interest??

Based upon my total financed as $38,688.12 with an interest rate of 5.04% for 75 months and $603.66 per month, my plan is to pay $700 per month and additionally an extra $700 payment of $700 once per year so instead of paying $7,243.92 yearly I will be paying $9,100 which would put my payoff at approx 45 (3 3/4 years) months instead of 75 (6 1/4 years).

What I am trying to determine if an algorithm based upon yearly depreciation of my vehicle for a relatively fixed point when I will have positive equity in my car (car presently valued at $25-26,000, yes I rolled over negative equity in to this car, last time I ever do that). I do not know the value of yearly depreciation for my make/model and if that is even a known value.

How to pay car off early 72months 5% 48 months left owe $2100… My payments are $483 monthly

Question. I pay my car payment early by 2 weeks every month. Always. Car payment is 413 and interest is 9.89. It’s a brand new 2016 mazda3. The loan was for 21,000

I have a $40,000 car loan for 60months with 12% interest.

I will be paying off $430 per fortnight.

I already saved up around $20,000.

I was wondering if its better for me to make a lump sum payment of $20,000

or make an extra payment every fortnight eg) instead of paying $430 per f/n, pay $500 per f/n.

I have $5300 left on my car. Interest rate 18%.

Monthly payment $315

How can I pay this off early

I have an auto loan that is originally $22,000. Every month my payment due is about $392. Every month my payment due is about $392 the interest rate is 8%. I’ve been paying $400 every month on the loan. The bill is due on the 2nd of every month with a grace period of the 13th. So what I’ve been doing is I’ve been paying it within the grace. So that is not late my last payment in May was for $400 on the 5th and it shows that I have $302 that is owed for next month’s payment due June 2nd. I assume that when I make my next payment of $400 that means $90 of it is going to be flooring towards the principal. Does this make any sense at all and I’m actually saving myself money

I have a auto loan for two years payment is 83.00 a week been making my payment the whole time have two months left on the loan still charging me interest is this illegal in PA?

I have an auto loan that is originally $14,500. Every month my payment due is 360.23 with 17.49 APR. I put down 2,500 and pay at least $400 each month but just found out that they charge $5.55 each day for interest! if I pay $400, they take around $195 for interest! After 2 years, I still owe 11, 356. How can I do to save the money that is going to the interest? I want to pay this car off quickly (willing to pay more) to save money but how much more should I pay each month to reduce the principal? Please help.

I have a yamaha loan 9% apr 285 amonth was 13k its down to 9500 in a little over a year..i sent 300 amonth most payments a few higher..im about to call in a 500$ payment this coming week..pure principal..makes a few radom payments to principal..and ull see it go down fastest

I bought a car and I have a car loan for 6,445 with interest rate of 18%. I am looking into building my credit. Should I refinance? If so, after how many months? I have the car loan for 5 years of course I intend to pay off sooner. If I pay it off sooner will this bring my credit score up??

So I’ve been trying to look into things on oozing my car of sooner, and nothing so far has made a lot of sense. I have a $16,000 loan I got last July. Interest is 3.75%. My automatic monthly payments are $295 and some change. Starting 4 months ago I’ve been making extra principal only payments of $350 every month, but I’ve been wondering if I should stop the auto pay and just make two regular payments a month with interest. Everything I’ve read so far had been very confusing.

I have a car loan at 2.98% owe 10,500 with payments of $216 a month. Which is apx 18% of my month!y bills. I have $18,000 in savings, simi retired.

I have been able to save $500 a month the past few months. Other debt. I hate to dispose of the savings

But I’m not making much with my cash .75%.

My car loan was $9,500 at 7.20%. My payments are $180.34 a month for six years. I plan on paying double for the months of August and September. Should I refinance, and if I do, should I make that double payment before or after the refinance?

Double payment meaning I plan on making a payment of $360 both months.

I have a loan of 13,000 with a interest of 24.99. I pay 402 a month..will paying biweekly help me pay it off faster since I have such a high interest

I purchase a lease to own car back in 2012 at 495.34 for 35 months. Total payment was 17,832.24 the car was fully paid for before my payments because my boyfriend 13,000 on the car payment…which I was aware of until this year …we have now paid double for the car… my residual what can I do to get my money back…someone please help.

I purchased a car for 21000, at 9% interest, I’ve been paying my payment on time for about 6 months, but I wanted to get a bigger car which the bank said they will finance but the dealer only wanted to give me 12,000 for my car? Any advice?

I purchased a truck back in November for around 28,000 with a 12% interest rate. Its now been seven months and I am getting letters in the mail to refinance. Since my payments are almost $700 a month I thought it may be a good idea to get them lowered to around $600. My problem is that the new lender is saying that I owe close to 30,000 still and the truck isn’t worth what I owe. Do I have to refinance the principal plus the interest too? Why do I have to refinance more than what I paid for the truck?

I am buying a car for $18k for 6 years at 18%. I know I will be paying around $30k for it. I have about 530 credit score is why. My payments will be $408 per month. What can I do to get it down after paying on it for a year? If I pay $450 will every other month will that help? Thank you for your advice, I do appreciate your time in responding!

I like this post, enjoyed this one thanks for posting. “The basis of optimism is sheer terror.” by Oscar Wilde.

[…] technique to consider is rounding up your payments. Rather than just paying the recommended monthly amount, round it up to the nearest […]

[…] 6 Ways to Pay Off Your Car Loan Early | Payoff Life – Why pay more than your car is worth when you can pay off your car loan early? About seven out of 10 people borrow money to buy their cars, and a car loan is one of … […]

Hi. I purchased my car last year. I owe 27,500. Monthly payment 589.00 with an interest rate of 10.29. I have 63 months remaining on my loan. I’ve never been late what can I do to pay my loan off before the 63 months. Thankso for your help.

I have $9500 left in my 5yr card loan with 6.9% interest @ $368 which I should pay off in 27months 9/18. I want to refinance with my credit union that offered me 4.9% with low payment of $301 but will pay off in 9/ 19 should I take it is just stick to eat I hv now.

[…] 6 Ways to Pay Off Your Car Loan Early | Payoff Life – We want to help you get out from under that loan faster and save money on interest by giving you ways to pay off your car loan early. […]

is it better to pay down principal or to make extra payments on your car loan?

Principal, instead of rounding up $20 every payment, it would be better to pay down the principal twice a year at $1000 each payment. I don’t have the math to put into the answer right now, but I assure you if you do the math you will realize this is the case. By doing this each of your payments afterwards is more principal than it is interest. In the long term this saves you more money. There are other strategies that combine rounding and paying principal that are a happy medium too.

I suggest sitting down and running the numbers one day. But to answer your question: Principal is better.

My credit union pre approved me for a first time auto loan of 20,000 with a interest rate of 9.99%. I need advice whether I should continue with this or try other credit unions to see what I am eligible for. What am I really getting myself into with this type of loan.

I have a car loan for $10,000 out on my used vehicle. The car is almost 10 years old so I wasn’t able to obtain a loan through my credit union but the dealer did approve me at a 6% interest rate for a term of 60 months. My payments are $251.00 but I walys pay $300. I am determined to pay my loan off early but my credit has since tanked from some delinquent student loans. Any tips for me on paying this loan off sooner.

By the way in the fall I may be in a position where I will be unemployed. Will the loan company work with me if that happens?

Hi! My car loan is for 29,000 with a 2.79% interest rate for 72 months. What do you suggest for paying the car off in 2-3 years, as far as payments? I financed through Navy Federal. Originally it was through the dealership worst mistake! Navy Federal gave me a lower rate.

I have a new car and the loan is 26,000 and my notes are 470.96 a month with 72 months to pay it off. I want to pay it off earlier, how can I go bout doing this?

I went online today to check my balance on my car loan. Amount financed was 20,000 at 19%, payments are 492.23 a month, my current principal is 18500.00. Each month I pay a little extra and over the last 10 months I’ve over paid 71.70. I found out today that if I want my overage to come straight off of the principal I have to make separate payments for that, otherwise they will take the overage off of the interest!

What?! No wonder I felt I was doing no progress in my loan

Hi i have a wrangler sports unlimited june 2016 4 door hardtop i bought it in 37500.00 and i did 2000 as down payment and balance is 35500 from which i paid 2 installements which is 545 per month with interest rate of 3.65%.due to some reason i cant able to afford that monthly inst. Pls guide me what will be the best way shall i return the vehicle to dealer or is there anyother way so i can get rid of it and atleast i get the down payment if i sell it.i just need the down payment anount and 1000 for the extra fitments i;e 3k.pls suggest

[…] 6 Ways to Pay Off Your Car Loan Early | Payoff Life – Why pay more than your car is worth when you can pay off your car loan early? About seven out of 10 people borrow money to buy their cars, and a car loan is one of … […]

[…] 6 Ways to Pay Off Your Car Loan Early | Payoff Life – Why pay more than your car is worth when you can pay off your car loan early? About seven out of 10 people borrow money to buy their cars, and a car loan is one of … […]

I’m looking to purchase a newer vehicle. I have approx a 640 credit score, when I bought my car a year ago I had a 550. I’m upside down in my current vehicle by about $3500 because of a 9% interest rate. Does it make more sense to pay down my loan before I purchase a new car or to roll over that negative equity into the new loan with a lower interest rate and then start making extra payments.

I recently purchased a vehicle this past Feb 2016. I got it financed through my credit union for $17,199.00 and the sales tax included for an addition $1500.00. It has has a 10.44% interest rate and a note of $378.43/mo. My payoff amount is $21,096.37. In addition, I also pay for GAP insurance. I read the 6 ways to pay off the car, and have a few options that I am considering. But I would like to know what you think to see if my thought decision is the same.

I don’t have a comment but a ? I am trying to pay my car off they say I owe 8000 on my car but that has to be with interest my car was 31000 I received the GM discount which took 10000 of so that left me with 21000 after tax and title and all the others it ended up being 23000 I have paid I have already paid 18,816 I should only owe 3,177 something like that but my problem is they telling me I still owe 8 I said if I pay it off early how she told be the finance charge but how will I have that if I pay early it’s like I will pay the whole 30000 lig I iwe 8000 more I’m not understanding how they can say I can’t pay it early then one person said send in the 8000 and they will send remainder I told her no they should be able to tell me the pay off amount if I pay it off

Hi. I am in financial straits right now. We had 3 cars repoed early 2014 due to medical issues. We now have a car that we owe 11,700 w/ almost 18% interest and kbb is only showing it worth 8000-9000$ we’ve tried selling straight out or trading with no avail. i have lost my job and do not want another repo on our credit. We have never missed a payment in 2 years and 5 months. But we can’t get our credit school to get over 520. Do you have any suggestions.

I have a car loan witch i pay 283.00 a mth i have 33 paymebts left witch means i still owe $7313.51 I am trying to get my credit scre up fast. Should i pay off what i have left all at once of should i just make monthly payments like i been doing.

Many of you may benefit from the tools at http://www.daveramsey.com . It changed the way I think about money. Start with the “baby steps”…..and he would probably recommend you sell your cars and pay cash for a junker and then slowly work your way back.

My husband and I found ourselves between a rock and a hard place after he totaled my vehicle. We have 3 kids all in car seats are didn’t have a vehicle big enough to transport us all. He went to a small dealership and purchased a vehicle without discussing it with me and he got scammed. We are paying $8,000 for a car that is $6,000 at most and that isn’t including the $4,000 that we will have paid in interest over 36 months. The payment is $308 a month and he had a 750 credit score. He was late on two payments and it dropped his credit by nearly 200 points. This vehicle is 11 years old and it is just not worth it! I’m desperate to lower our payments or just get rid of it. He is finally on board with trying to remedy the problem, but with his credit being so low, I don’t think it’s an option anymore. What can we do?

Thank you for this article! I’ve been trying to determine if paying my car note biweekly would effect how much interest I paid down. I was once told paying twice you are charged for interest twice which can reduce your payment toward the principal balance. Also I plan to make a large payment this year with my tax return to hopefully make a dent in the loan. Thanks again, great advice.

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My interest rate is 28 percent I have 2 yrs left on a 5 yr loan and finally my interest has been paid off and each month my pay off amount is lower and lower as to where before each yr I called it was more then the last yr …I want to pay off in full the site says request pay off quote does that mean I may get it cheaper or does that mean I will have a penalty for paying off early.

I have car loan for $14,756.72 on 72 month. With a really high 16.94% interest rate. Payments are 330.10 a month and i have been paying 400. Where will I really see the benefit because it has been showing less going to the building interest to a point where its almost not paying the monthly interest. I know i need to refinance but if i didn’t about how many months would it take me to pay off with what savings?

I owe a truck with 2.25% interest 5 years loan and SUV with 1.99% 5 years also total of almost $70,000 should I refinance my house and pay off the cars?

I currently owe 10600 on my car. My interest rate w my lender is 6.96 & my payments are 204$ a month (I cant remember how long the length of the loan is). I applied for refinancing at my credit union & I was approved for 7.25% interest, my payments would be 185$ for 72 month term & theyre having a promotion where they cut you a check for 200$ for your own use for financing with them. I am weighing all of this & call me dense but what is the best decision? Should I stay with my current lender or go through with the credit union?

I have a car loan for $13,490 with an APR of 21.54% over 72 months. What should I do? Any advice?

I have a $13,100 car loan (that’s also paying it down after 3 months) and this month I’ve paid an extra $300 on it. 25% interest (due to a very poor credit score) and my original monthly payment is $268.03 (I say $270 just to be safe) and I try and pay between $270-300 a month. I’d like to trade it in by the end of next summer 2017 for a newer car with a way lower interest rate if possible. Any ideas how to pay it down to where I can trade it in by that time? Mileage is also very very high

My loan term is also 48 months

I am financing a 2005 Pontiac grand am with 155000 miles. It has a kbb of $3400. I was told my payments would be $150 over 24 months. I got my coupon book from the bank and my payments are $200 over 36 months. I was already overpaying, but this is ridiculous. Any suggestions?

I have current principal of $26,500 and interest rate of 4.9%. It’s a 72 month loan and I have 65 months left. My monthly payment is $451. If I send in an extra $500 per month toward principal how long will it take to pay it off?

I have read so many posts on the topic of the blogger lovers

however this article is actually a nice post, keep it up.

I pay $248 per month with 21.5% interst, for 60 month. And my loan is $9500. What should I do to paid off ASAP. I have been paying for 4 month and my loan is not reduced, still (it reduced abt $100).

Please i need advice!!

I have a loan of 12,700, monthly payments of 274 and 10% I’m only really paying $165 monthly for my car. I’m gonna be stuck paying that for 6 years ! Can someone give me some advice or something please..0

I meant 10% interest.. someone please give me advice. I didn’t pay attention to interest and now I feel like I’m stuck.

I pay 580.00 monthly interest is 6.5% i have 5 years left on my loan but i want to pay off in about 3 years how much do i have to give more?

and i owe 29,000

I had cash money to buy out right my now 2016 Jeep. Was advised to finance it for a few months to build my credit. Since then my daughter enrolled in a local community college and was denied a grant, leaving me to pay for her college out of the money that was put aside for the Jeep. Now, after losing my job I’ve had to dip in the money once again for a few months worth of household bills. Finance co says my “payoff” is $44,000, and the amount of money I now have put back to pay it off is $33,000 leaving me $11,000 short (keep in mind in the mean time I’m paying a $891 monthly jeep note)

A friend told me that sometimes u can offer the finance company less than the payoff and they will accept it if it’s a reasonable amount. Has anyone ever tried this or know if this is true?

Hello I have been paying 972 dollars per month for my new truck for the last 16 months. I have a high payment because 1 the truck was brand new and 2 because I carried over a few thousand dollars in negative equity. My fico score is 700. I would like to pay this thing off sooner than later as its killing me. Any positive advice for this?

I received a letter in the mail from my bank offering to allow me to defer one payment for the holiday season. What if I took the deferment and used it to make one extra principle payment the following month?

I am currently dealing with financial issues and do not know what to do. I only have $3300 left on my car loan that will be paid off in a year. Payment is $264, and I pay $270. My interest rate is 4.2% because when I bought the car, I had no credit. Since then because I have maxed out my credit cards by being in such a bad financial place my credit has gone to 550-580 range. My car insurance is close to $250 a month too (I have no tickets/traffic violations and have Defensive Driving). I am wondering if it is worth getting a $3300 loan to pay off the car loan? I have seen rates as high as 45% but repayments less than the car payment and insurance combined ($100 – $150 area). The financial issues I am dealing with will take effect for as long as 6 months and will be paying the amount off sooner than the loan term once I am in a better place. Would it be worth to take out the loan if I can lower my car insurance by dropping the full coverage and then pay off my $270 car payment?

I got car loan for 37000 I want to refinance im at interest rate 4.74% my fico score is 661 should I pay car notes for 6 months on time plus extra and then refiance I currently pay 584 monthly I wanna get car note to like 400

I have a 38,000 car loan at a 10 percent interest rate for 7 years that’s bringing a 38,000 car to a 55,000 dollars total after everything is paid. What do I do this is too much and crazy.

If you haven’t missed payments, and you don’t like the idea of selling the car which is of course your best option then you should strongly consider refinancing this loan. 10% on a car note is wicked!

I dont understand this loan thing. I signed up for a 60-month loan, but I am paying $300 more that the set up payment. And while doing calculations, I will end up at the 60-month mark still.

If I am paying more than usual, shouldn’t I finish the loan sooner?

Hello my name is john,

I have a loan of $32,000 at 6.34% i have made 12 payments of 484.84 im looking to refinance i got an offer of 3.34% at 36 months my idea is to pay faster my original loan was 66 months i want to get it down to 36 months to pay off faster would that be a good idea?

I bought my first new car financed at $16,744.14 (original amount) about a year and a half ago. Maturity date is 6/21/2020. APR is .9% (thankful). I pay $285.62/mo (usually more) and have never missed a payment. I have enough liquid cash to pay off the car now, but am wanting to know when is the best time of the year to pay it off. December? My payoff quote is $11,793.31. I also purchased GAP and a warranty and am wondering of I should cancel both before paying the car off in full in order to shorten the term. Thanks in advance for your advice!

I got a loan for 42,000 at 3.15% for 72months my monthly payment is 535.88 and I been pay 540 for the last 2 years currently my Loan balance is 29,588 I like to find a way to pay it faster with out pay the interest. How do I pay the extra money on the principal so that they don’t take any interest. Please advise. Thanks

I am a little confused by how this works…

I have $9412 left to pay with the interest rate of 4.99%, monthly payments of $213.54 and I am actually paying $350 each month.Looks like I will be done in 27 months. I refinanced with the other bank and got a 2.99% rate with the payments of $361.77 for 27 months. So…with the lower rate but paying more I will be done also in 27 months? I don’t see the point of refinancing…

Hello.. My car loan 606.38 per month on a 72 month loan.

This is a alot, what can i do to try to end the loan early.

Could someone please answer my question? I have a 6700 $ loan at 9.997 % with 52 months remaining. Once my tax return comes in I want to invest 1-4 thousand dollars towards paying off the loan. how much in savings can I expect on this situation. Does this effect payments whatsoever?

Check out bankrate.com, they have some great estimators. Paying off that much of your relatively small auto loan would save you quite a bit in interest and I would estimate it would cut several years off of your payments. The only thing to consider is, is this your highest interest rate for all of your debt? Perhaps you have credit card debt with an APR in the upper teens that would save you more money to put down?

Hello my name is Miguel

I have a loan for 29,700 with payments of $410 with a APR of 1.9% do you recommend to refinance the car or not ?

Hello there, I did a Re-fi on my car, and my payments went up by $36.00. The extra $5000 I received in a check, I used to pay off a credit card and $2500 into a CD for a year. After the year, I’m going to use the balance to pay off the personal loan. The personal loan is at 13%, my automobile loan is @ 5%. My auto loan is for $14, 219. I’ve been paying $75 per month into principal only in addition to my regular car payment. By paying off the personal loan early next year, I’m going to be able to utilize those funds of $163 and add that amount to the $75 I’m already paying towards principal. only. My auto loan is for 60 months. I’m going to be able to finish paying it off in 44 months. Can anyone tell me how much I could possibly save?

Just purchased a 2017 Nissan Altima.. APR 10.81/ Finance Charge 10,935$/Financed Amount 28,328$ for a Total of roughly 39,263$. Why would the total sale price be different (I.E 42762. ) and what would it take to pay this early.. Shorter than 6years ?? monthly payment of 523. thank you. please AND thank you.

How do I get my payment down it’s 596 a month. I just checked. Had the car since June doesn’t look the the big amount went down at all -___- please help.

I have a $11500 loan at 3% with 33 months remaining and monthly payment of $380. My company recently moved to mexico and I have returned to school full time. What is the best way to lower my monthly bill or get out of this loan. Please advise.

I have a $15,500 car loan with 15% interest, a 60 month plan and my car note is $318 a month. If I pay $2k on my loan next month, what will happen? Also, how much interest will I pay over time?

Hi. I am a first time buyer. I was not aware that a loan company could double the Interest rate of a loan if payed late.I have always payed but now don’t know what to do. Have had my car almost a year. What should I do? Pay another finance company 3000 dollars and get a interest rate of 4.5 or give a big 3000 to my finance company and then refance?

I have always paid my loans weekly. I simply divide my monkey car loan payment /4. Currently, my car payment is $499.08 x72 months for a total of almost $36,000. I pay $125.00 every week and I make a large sum payment of $2,500 once a year. How many months or how much money do I save in principle alone with my weekly payment theory? 7.79% interest rate. Is there any place I could put that into a amortization schedule to see weekly vs bi weekly payments? And how it affects Principle? Is my theory even making a difference.

Hi! I just bought a car and put 8000.00 down. My remaining balance is 4014.00 to pay the car off. My car note is 112.00 a month. I have the money to pay the car off but should i wait? My credit score needs improving. What do you suggest the best tactic to boost my credit score and pay towards the remaining balance of the vehicle? Thank you!