As you’re looking at the perfect new car to buy and figuring out financing, it’s a good idea to think ahead about paying off your car loan. Car loans might be a part of life, but that doesn’t mean you have to spend more years than necessary paying them off. Here are a few methods you can put to good use to become the legal owner of your car ASAP.
Make Principal Payments
Depending on your lender, you might be allowed to make principal-only payments. If so, take full advantage of it. What that does is cut down on the amount of interest being applied to the total remaining loan, and you pay your loan off faster.
Pay Your Loan Twice a Month
Another good idea is to split your monthly car loan in two, making a payment twice a month. The reason this is a good idea is that you make 13 payments a year rather than 12. Not only do you pay your loan off faster, you also save money in interest.
Round Your Payments Up
When it’s time to make your car payment, round up to the nearest $50 whenever possible. You can combine this tip with the one above, splitting your payment in two and adding an extra $25 to each.
Use Extra Cheques, Bonuses and Tax Refunds
After a while, paying your car loan can become just another monthly financial obligation to take care of. This means you might forget about it when you get an extra cheque, your tax refund or a bonus at work. When you do get some extra cash, stop for a moment in your excitement and think about how you can best use those extra funds. While making an extra car payment might not be as exciting as a new pair of jeans or home renovations, your future self will thank you.
A few tips and some strategy are all you need to pay off your car loan early. Be sure to put these suggestions to good use.
In all your excitement about getting a new car, make sure you don’t forget the importance of putting down a large down payment if you plan on financing your new ride. There are all types of loans, including bad credit car loans, but most of them will require the borrower to offer up a down payment to get the ball rolling. Here are a few tips for saving up a larger down payment to reduce the amount you have to borrow, and potentially your monthly payment:
Take Care of Your Credit Cards
If you have any credit card debt, taking care of as much of it as you can means you have more money you can devote to your new car’s down payment. If you can’t fully pay off one or more of your credit cards, look into getting a personal loan so you can consolidate your debt and net a lower monthly payment. You can save the difference between your old monthly payment and your new monthly payment in your down payment fund.
Ask for a Raise
Depending on your employment record and your employer, you might qualify for a raise. Rather than focusing solely on your down payment, base your requested raise amount on your professional accomplishments instead.
If you can’t get a raise, look into doing odd jobs on the side to make some extra cash without looking for a part-time job.
Sell Unwanted Items
You may have unwanted items collecting dust and taking up space in your home, ones that you can sell for some extra cash. It’s never been easier to unload unwanted items either online or within your neighborhood. Just make sure you do yourself a favor and do some research first to see how much your unwanted items are worth so you get a good deal.
With a little ingenuity and patience, you can save up more than you thought possible towards your new car. Best of luck!
Very few people can afford to pay cash up front for their next vehicle. Most buyers must finance a car through the dealership. Buying a car can be a significant expense, but car loans don’t have to break your budget. With a few minor tweaks to your car payment habits, you can save hundreds or maybe even thousands on your car loan.
It just makes sense that the best way to save money on a car loan is to borrow less money from the start. Lowering the principal of your loan means you never have to pay interest on the amount you don’t borrow. You can lower your principal by making a large down payment or by trading in your old car. It is also a good idea to only purchase the add-ons that you really want so that you don’t have to borrow as much money for things that seemed like a good idea at first but that you won’t ever use.
The longer the term of the loan, the more interest you will pay in the long run. It may be tempting to opt for the lower monthly payment, but it will cost more over the life of the loan. As long as you can afford the higher payments that come with shorter terms, that choice is in your financial best interest.
When discussing the terms of your loan with your dealer, make sure there is no penalty for early payments. That way, if you have extra money one month, you can make an extra payment. Making a regular habit of paying extra any time that you can cuts down on the interest you will pay over time.
Car loans are an added expense, but they don’t have to be a stressful one. By making a few changes in the way you pay off the loan, you can save quite a bit of money.
Car loans are a great way of establishing a good credit history. But many people are intimidated because they hear false information about car loans. There are many misconceptions about getting a car loan that people need to be aware of.
Myth #1: You need credit before you can get a car loan. This is the biggest myth that often intimates people from trying to purchase a car. The truth is that almost anyone of legal age can get a car loan with a valid driver’s license and proof of income. Each of these is essential in making sure that you are a good credit risk. We work with quality lenders to make sure you get a rate that you can afford, which will in turn help you to establish credit.
Myth #2: You can’t get a car with bad credit. This is absolutely not true. In fact, many people use car loans as a way to re-establish credit. The lenders we work with assess credit risk and worthiness based on income. Making regular on-time payments on your car loan can help to rebuild faulty credit.
Myth #3: You need to have a down payment to get a loan. The third of the myths is also not true. Most people can walk into a dealership with nothing but their driver’s license and pay stubs to prove that they can pay an installment loan and can ride out of the dealership in a car. We work with a variety of lenders who will finance your car with no money down.
Now that you know that many myths you believed about getting a car loan are false, why not venture out and get one for yourself? A car is not only means of getting from one place to another on wheels, but also a way to get to another place financially. Visit us for a vast array of cars and financing options.
If you have no experience rebuilding bad credit, it can appear to be a daunting task. Take heart, though, for the right strategy can lead you to take measurable steps to improve your credit score faster than you ever dreamed possible.
Reestablishing credit with car loans is one of the best ways to accomplish this goal. When the new loan payments are paid in full and on time, you will receive a good mark on your credit history with each month that passes by. Even following a bankruptcy, this means that in the future it will be easier and cheaper to borrow money.
Automobile financing provides much less risk for our lenders than if they were financing a home. This is obviously due to the amount of money being loaned to the borrower. Reestablishing credit with car loans is a wonderful opportunity to demonstrate to the financial community that you are responsible and ready for more risk.
If you have been wondering if it was possible to get a car loan with bad credit, or you have been wishing for a way to improve your credit score, worry no more. Many kinds of people have rebuilt their credit in this way, and so can you. Your first goal as you enter this process should be to ensure that you don’t make any rash decisions that can make your credit score worse. Carefully consider how much you can afford, and be sure you can make the car payments every month.
In addition, make sure that you carefully consider the interest rates you are offered when you apply for your new loan. Lenders who specialize in bad credit car loans know how to help you rebuild your credit, but also are known to charge exorbitant interest rates. It’s important that you choose and work with a company that will help you partner with reputable lenders who run their business with integrity. The Loan Doctor can help you, call us today!