3 ways to help you pay off your car loan faster
There’s nothing quite like the feeling of buying a new car and zipping off in your very own set of wheels.
When you use a car loan to make that exciting purchase, it helps you financially to pay it off as soon as possible. Here are three great ways to clear yourself of debt sooner!
1. Start with a low rate loan
Buying your car with a low rate car loan is the best first step to help pay off your car loan as soon as possible. This way, you pay less interest than you would otherwise pay if you had a higher interest loan.
Additionally, it helps to find a loan with minimal fees and flexible repayment options to further reduce costs and make it easier to repay the debt. Low rate loans at Beyond Bank don’t charge any fees for paying off the debt early like some lenders do, so this flexibility will work in your favour should you be able to make additional repayments.
2. Round your repayments up
If, for example, you are required to pay $187 per fortnight on your debt, consider rounding that up.
Paying $200 per fortnight instead would bring your annual repayments up to $5,200 rather than $4,862. That’s a difference of $338 per year for the price of a large coffee each week. Not only would this help to bring forward the day you will be debt free, but it also reduces the amount of interest you’ll pay overall.
3. Make a one-off payment
Don’t forget that you can make a one-off payment to reduce the debt.
Perhaps you inherit some money, sell off an old gaming console you no longer use, do a one-time job for a little extra cash, or even simply manage to budget well enough to have funds left over at the end of your pay period. No matter the source of the income, you can easily put it against your debt to help pay it off sooner. Be sure to talk to your lender about how to do this when you take out the loan so you won’t have any excuses not to make a one-off payment should the opportunity arise.
Don’t forget that you can use this handy car loan calculator can help you figure out how long it will take you to repay your purchase.