Pay Your Car Loan Off Early & With Ease In Niagara Falls

Pay Your Car Loan Off Early & With Ease In Niagara Falls

Posted on March 22, 2021

Let's talk about the best ways to pay your car loan off early and be debt free in that regard. I think we can all agree that there’s no feeling quite like being debt free. It’s a very cathartic feeling that makes you feel more relaxed than you probably have in a long time. Even though we promote auto loans and sell cars, we also promote financial wellbeing. That’s why we’re sharing some actionable ways to pay off your auto loan early.

We asked our Niagara Falls auto loan team to come up with easy ways to settle your loan early. Here’s what they came up with.

Set up Higher Automatic payments to pay your car loan off early

If you didn’t set up automatic payments when you took out your auto loan, do it now. This sets the baseline and ensures that no matter what else is going on in your life, your loan payments always get made.

Round up your auto loan payment

Rounding up is a simple accounting method to overpay something. It won’t make a massive difference but can save money over the long term.

For example, say your Niagara Falls auto loan is $250 per month. Rounding up to $300 means an overpayment of $50. That’s a decent percentage overpayment. It should reduce the term significantly and save you money in interest!

You can apply rounding up to your automatic payments by working with your lender.

Higher overpayments

If you can afford to pay more each month, you can do that. Most auto loans will allow you to overpay without penalty. Some specialist loans or those with special terms may not. Check your paperwork first.

In that same $250 a month auto loan, paying $400-500 per month could almost half the term, which will save a lot in interest.

Lump sum payments

Come into some money? Got a bonus from work? Use it as a one-off lump sum overpayment on your Niagara Falls auto loan. This is another viable way to repay your loan early. Whether it’s a few hundred dollars or a few thousand, it all helps.

Make sure to tell the lender you want it to go towards the principal, the amount you borrowed, rather than the overall cost that includes interest.

Use savings

Using up your savings to pay off a loan isn’t always the best use of money but it is an option. This is especially true if you think you’re going to have problems paying the loan each month.

Just make sure you leave something for emergencies. You know as well as we do that when an emergency happens, it will be days after you emptied your savings to pay off the loan!

Refinance the loan

Swapping out your existing loan for a shorter one is also a way to pay it off early. If you’re a way into your loan and have paid a good portion of it, you may be able to refinance for a shorter term.

As long as the interest rates are favourable, this is another way to potentially pay your loan off early without putting undue pressure on your finances.

When you’re ready for a car loan, get in touch with the Niagara Falls car loan experts at Northway Ford for great deals on auto finance.

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