How to pay off your car loan sooner?

When people take out a car loan, many look to just set and forget. This could be a mistake and it is well worth considering ways to pay off your car sooner so that you can own it outright and save on interest.

Here are some options:

Extra repayments – if you have the ability to make extra repayments this can be a great way to reduce the principal component of the loan. Just be sure to check that this is possible based on your loan conditions.

Repayment frequency – by increasing the frequency you make your payments, you can pay down your loan sooner. Instead of making 12 monthly payments, consider upping that to 52 weekly payments and you’ll in effect be paying down more each year.

Round-up – instead of making the minimum repayment, round up your repayment to the nearest round number. That could mean instead of paying $270 each month, you’re paying $300. It’s a small change but can save you a lot of money.

Refinance – if you’re not happy with your interest rate, it might be worth looking at your refinance options with your mortgage broker. Sit down and look at what the costs to refinance might be and how that would compare with your current rate.