Having a new car is exciting, but dealing with the loan isn’t. Often, car loan payments are substantial, adding up to hundreds of dollars every month.
Luckily, there are things you can do to get out from under an auto loan fast. If you want to pay off your car loan in 24 months, here are some hacks to try.
Pay Off Your Car Loan with Bi-Weekly Payments
Most car loans require monthly payments. But, if you choose to make bi-weekly payments, you can pay off your car loan faster.
All you have to do is divide your monthly payment by two. Then, schedule a payment for that amount every other week.
You’ll end up making a full extra payment every year, and can save big on interest along the way.
Get the Cheapest Auto Insurance with Online Quotes
Every insurance agency offers a different cost, so compare quotes to get the one that’s the cheapest and best coverage. Even if you’re a high-risk driver you should use an online service to compare SR-22 auto insurance quotes and save tons. Over time you can end up saving hundreds if not thousands of dollars! Doing this will greatly help with paying off your car loan from the savings you get.
Round Up Your Payment to the Nearest $50
If you make a higher payment, you’ll almost always come out ahead. One of the easiest ways to manage it is to round it up to the nearest $50.
For example, if your car payment is $316, round it up to $350. Not only does this make managing your budget easier, but it lets you apply extra money to the principal every month.
Apply Financial Windfalls to Your Loan
Do you get bonuses at work? Did you get a surprise birthday check? What about a tax refund? If so, use the money to pay off your car loan faster.
Every little bit helps, so don’t be afraid to use this approach with anything from large bonuses to the $20 bill you found on the street.
Whenever you get an unplanned windfall, send those funds to your car loan as a lump sum principal payment.
Moonlight or Freelance for Extra Income
If you have some extra time in your day, consider picking up a second job to help pay off your car loan. Whether you can shoulder a freelance project or commit ten hours a week to an employer, any extra income can help pay down your principal faster in conjunction with your regular paychecks.
Sell Your Excess Stuff for Quick Cash
Most people have some things lying around that they simply don’t need. And, if you sell those items, you can earn money to put toward your auto loan.
There are a lot of options for selling stuff, ranging from garage sales to apps like LetGo to websites like Craigslist. Whatever approach you prefer is less relevant than getting your things out there. Go through your home, grab everything that hasn’t been useful in the last year, and see if you can turn that stuff into cash.
By following the tips above, you can pay off your car loan much faster than you may realize. And every extra payment lowers the total amount of interest you’ll pay, so why not get started today?
Do you have a hack to help pay off a car loan fast? Share it in the comments section below!
Looking for more great tips from Stapler Confessions? Here are a few to get you started:
- How to Get the Best Auto Loan Rates
- Do the Advantages of Leasing a New Car Outweigh the Disadvantages
- How to Get Cheap Car Insurance
Tamila McDonald has worked as a Financial Advisor for the military for past 13 years. She has taught Personal Financial classes on every subject from credit, to life insurance, as well as all other aspects of financial management. Mrs. McDonald is an AFCPE Accredited Financial Counselor and has helped her clients to meet their short-term and long-term financial goals.