Signing loan paperwork

Paying Off a Car Loan Early

Many local drivers around Metairie and Slidell wonder, “Is it good to pay off a car loan early?” Our team here at Premier Chrysler Jeep Dodge Ram FIAT can help with paying off a car loan early. Although your new or used vehicle carries an established loan when you finance, you can contact us to adjust your auto payments. However, before you do, allow our expert finance team to address some of the most common questions about how to pay off a car loan early! 

Is it Good to Pay Off a Car Loan Early?

Absolutely! You’ll need a solid financial plan for paying off your car loan early, but it’s certainly possible. Therefore, it’s best to meet with your financial advisor to talk about how to pay off a car loan early at Premier Chrysler Jeep Dodge Ram FIAT near Covington. When you pay off your car loan early, you’ll experience a few advantages:

  • Lower overall interest paid
  • Decreased debt-to-income ratio
  • Owning your vehicle more quickly

How to Pay Off Your Car Loan Early

Assuming that you have a stable financial situation and wish to continue paying off your car loan early, here are a few simple steps you can take to pay off your loan sooner: 

  • Round-Up Your Vehicle Payment Monthly: Round your monthly vehicle payments to the nearest fifty dollars every time you make your payment.
  • Bi-Weekly Payments: Verify with your lender that you can make bi-weekly payments as this isn’t always allowed. If it is permitted, divide your monthly car payment into two and ensure that you make your payments every two weeks. Thus, you’ll make thirteen vehicle payments each year instead of twelve. 
  • One Lump Sum Extra Payment: To get the same interest savings as you do when rounding up your vehicle payments, pay one lump sum-a one-time payment that’s a large portion of your vehicle loan each year.
  • Refinance with a New Vehicle Loan: Assuming that you have a good payment history by making your monthly payments on time after two years, you may be allowed to refinance your vehicle loan. You’ll only want to refinance your car loan if you can garner a lower interest rate than your current rate, however. You can use the extra money to pay off your car loan early. 
  • Avoid Skipping a Payment: Avoid skipping a car loan. Though many lenders will allow you to skip one or two payments annually upon consent, this is designed only for financial emergencies. Should you use this payment pass, you can lengthen your car loan term and gain additional interest. 

Find More Financing Tip from Premier Chrysler Jeep Dodge Ram FIAT

Be sure to consult with our Premier Chrysler Jeep Dodge Ram FIAT to learn how to pay off a car loan early in a way that makes sense according to your unique financial situation. With our expert finance team’s help, the right circumstances, and a good strategy, paying off a car loan is certainly possible. Contact us today to learn more about paying off your car loan early! 

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