Can I Pay Off My Car Loan Early?

Woman Standing Outside of Car With Keys

Humble drivers wondering about paying off a car loan early, keep reading. Northwest Chrysler Jeep Dodge Ram is going to cover everything from how to pay off a car loan early and whether or not it is good to pay off a car loan early. If you have lingering questions after reading this guide, be sure to give us a call at (832) 912-2500. Have other automotive questions? Explore our manufacturer guide for informative reads about the differences between diesel and gas trucks and theUconnect® app.

Is it Good to Pay Off a Car Loan Early?

That depends. When it comes to paying off a car loan early, Sugar Land drivers will have to look at their motivations for paying their loan off early, as well as the situation they’re in.

When Paying Off a Car Loan Early Makes Sense

  • If you don’t have a lot of debt and you can afford to pay your loans off early
  • You have enough savings and a steady enough income to pay it off early without putting yourself in a situation where you may have to pull from emergency funds
  • You’re trying to lower your month-to-month expenses so you prepare for an even greater financial goal

When Paying Off a Car Loan Early Isn’t the Best Option

  • You don’t have emergency savings or retirement (these should come first)
  • If you’ve got a great interest rate on your loan, it may be smarter to take that money you’re planning on putting aside and use it for something like building an emergency fund or your retirement fund
  • You’re using your payments to build positive credit history
  • Your original loan stipulates early payment penalties

How to Pay Off a Car Loan Early

You have options. When comes to paying off your car loan early, you can:

  • Make Bi-Weekly Payments – Divide the amount of your monthly car bill in two. Then, pay that amount every two weeks rather than once a month. Since often months have different lengths from one another, you’re likely to come up with an extra month’s worth of payments each year.
  • Round Up Your Payment Each Month – Each time you make a monthly payment, round up the amount to the nearest $50.
  • Make One Extra Payment Each Year in One Lump Sum – Simply make one extra month’s worth of payments each year.
  • Refinance with a New Car Loan – See if you can get a different lender to loan you the money to pay off your current car loan with a lower interest rate.

Get in Touch About Paying Off Your Car Loan Early

Cypress drivers who are still unsure about how to pay off their car loan early or whether or not it is good to pay off your car loan early should just get in touch with our financiers. We’ll walk you through the steps. Be sure to use our monthly payment calculator to play around with determining what kind of monthly payments you can afford.

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