Car loans can be a huge burden to carry. That’s especially when they’re just sitting there waiting for you to pay them off. However, there’s more than one way to make your situation manageable. Read on for some tips that might aid you in paying off an early car loan!
There are multiple options for those who have a car loan but want it gone. These include the snowball method and simply not using the vehicle. We are going to discuss those within the article. So, let’s start..
Can you pay car loan off early?
Well, the answer is yes, you can pay off an early car loan. However, you might want to refresh your memory on how it is done. Paying of a car loan early means that the vehicle will not be used for payments until it is completely wiped out completely. The general idea is to have the loan paid off in full at a newer date so that you won’t be stuck paying these monthly payments for a long time.
There are two major ways to pay off an early car loan. Both of them have their advantages and disadvantages, as discussed below.
Read: All you need to know about refinance student loan in 2022
Snowball method
The snowball method is relatively popular when it comes to paying of early loans. The idea that it is based on is simple – you make a schedule of all your recurring expenses. Then put the most expensive payment first, following by the next one, then the next one and so on. You simply have to prioritize what you can afford first before going for the less important ones like gym payments, internet bills and phone bills. You know that you won’t be using the vehicle whenever it comes to payments.
But the snowball method has its disadvantages as well as advantages. The biggest problem with this method is that you don’t know exactly when you will get your loan completely cleared. It is possible that the car loan will take longer to end than expected. In some cases, it can even take longer than expected for you to get out of the car loan entirely. And if this occurs, you might have a hard time paying for the remaining payments on time and might end up in trouble with your bank for being late with payments. So, this method is definitely dangerous and unsafe.
Simply not using the vehicle
This is probably one of the safest ways to make quick money. You won’t have to deal with any complications and hassle when it comes to late payments or missing payments. However, there are disadvantages as well. Let’s say that you have decided to just not use your vehicle and get rid of it instead – will you avoid paying your car loan? Yes, but by just doing this, you are delaying the time when you can pay off the loan in full – when it’s fully paid off at a newer date. And in the meantime, you might have to deal with the risk of being late with payments, which is a big problem.
So, how do you get rid of your car loan without having to deal with all the hassle? If you want to avoid problems and complications that come along with paying off early loans and you want money back in your pocket as soon as possible, then contact us today through our Contact Us page.
Additional Tips
In case you’re having trouble saving up extra cash for your payments, it might be better that you sell your car. In this way, you can get rid of the car loan and get the cash while at the same time enjoying your life without the added monthly payment.
This might be difficult for people who have emotional attachment to their cars. But, it is something that might reap some benefits in the long run. You can always use your savings to buy a new car instead of paying off an old one! If you are fine with using public transportation for a couple of months, you can do so as well until you have saved up enough money to pay off your loan.
An alternative method is to register the car in your name. This will enable you to pay off the loan and use that money for other things. The only problem with this method is that it will involve a lot of paperwork which could be time consuming. You are, however, free to do this as well! But, if you want to speed things up and get it done quickly, taking out a new loan might be your best bet.
Should you pay Car loan off early?
If you are having trouble paying car loan off, the best thing to do is to keep moving forward. If you need the money for groceries or rent and have no other choice except to get the car paid off, then it is best that you start paying it early. And if that option is not available, do your homework on different options of getting rid of a car loan and find one which best suits your finances.
It also depends on how much you can pay off at a time. If your monthly payments are $100 each time and you have been paying for 13 months at this point, chances are that these payments will still be smaller than your entire debt compared to the EZ form 1040 page.
If you are looking for a better alternative to your situation, it might be a good idea to consider purchasing an old car. This is an efficient method if you have been using the same car loan for some time and want to get rid of it as soon as possible. You can simply purchase a used car and register it in your name without having to deal with all the hassle of paperworks or making payments.
If you are considering buying a used car, here are some of the important aspects to keep in mind:
It is important that the car that you have chosen is in good shape. This will save you time and money. On top of this, any car that is not suitable can cost you a lot more than what it should be because of unnecessary repairs and issues that come with it. It takes a lot of time and money to maintain an old car so make sure it suits your budget needs. Also, check for any paperwork related to the said car before buying it.
There is one more very important thing which you need to consider before considering purchasing an old car – mileage.
Bottom Line
Car loans can be beneficial when they’re correctly managed. In case you want to pay off your car loan early, or generally, then you should know that it is possible to do so. You can either take a second loan or deposit the money in another bank account which has a positive interest rate. If you think that your credit score is fine and will not bother you much, then paying of an early car loan should be just fine. Indeed, a lot of people are actually interested in paying these things off as soon as they can and they do!
