Aside from winning the lottery you probably won’t be able to pay off your loan months in advance of its term end. That being said, there are a few tricks that will help you speed up the process, but you need to start now. Remember that paying off your loan won’t happen by accident, you need to plan and prepare for it from the beginning.
Pay Bi-Weekly instead of Monthly
Instead of paying once a month split your payment in two and submit one every two weeks. Doing this will accomplish multiple things – the main being that less interest can accumulate because you are paying more frequently.
Take some time to discuss these options with your lender before making the payments. You don’t want to be penalized for extra payments!
Round up your Payments
While we’re on the subject of monthly payments here’s another tip. If your monthly payment is something like $327/month try rounding it to $350. The extra money will help bring down the length of your payment, like the next time.
Make a Lump Sum Payment
Did you luck into a bonus this year? If you happen to come into some extra money, whether it’s gift or inheritance, a performance bonus, tax refund or a part-time job, why not pay off a little bit more of your car loan? By making a larger payment, or extra one, you can speed up the repayment of your loan. In the long run you will save some of the money you would have spent on interest.
Get a jump on your payments and you could substantially mend your credit score. What are you waiting for? Get saving!