How to Pay off Your Car Loan Early

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Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.


, - January 31, 2019

If you’re looking to trade in your current car for a new one, you may be considering paying off the car loan early to move forward. If you’re in the middle of your auto loan, you need a payoff quote to know how much you need to pay in order to be free and clear of the loan. If you can’t make the payoff amount right now, there are other ways you can work toward paying off your car loan early.

First Step: Get a Payoff Quote

First, you should request a loan payoff amount from your lender. You can do this by going online, calling your lender, or visiting them in person. A payoff quote lists the additional interest since your last statement, and any fees or early payoff penalties (in most cases there shouldn’t be any). Most payoff quotes include seven to 10 days of additional interest to allow you time to mail in a check.

Remember that you’re requesting a quote, and that you aren’t required to pay the loan off. If you decide not to pay off your car loan, just continue to make your payments until you feel financially ready to pay off your vehicle.

5 Ways to Pay Off Your Car Loan Early

When you can’t pay your loan off in full, what comes next? Even if you aren’t able to pay it off all at once, you can pay your auto loan off earlier by doing any of these four things:

  1. Round up payments – This is an easy way to pay off your car loan faster. If your payment is $380 a month, consider rounding it up to $400 a by adding an additional $20. Depending on where you are in the loan, you could reduce the term by a few months to even a year simply by paying more each month.
  2. Make bi-weekly payments – Typically, auto loans require one monthly payment. But you can make bi-weekly payments if it’s a simple interest loan. What you do is submit half of your car loan payment every two weeks. In the end, you end up making an extra payment each year, which helps you pay off the loan early.
  3. Make an extra payment every year – When you don’t have the ability to make bi-weekly payments, an alternative is to just make one extra loan payment each year whenever you can.
  4. Use tax refunds or bonuses – If you’re looking for extra cash to help pay off your vehicle early, why not use a recent bonus or tax refund? Depending on how much you receive, you could use this money to do any of the three things listed above.

The Bottom Line

Car financing isn’t cheap. It takes time to pay off an auto loan, but you can use money-saving strategies and early payoff tips that can help shorten your loan term.

If you’re ready take on a new car loan, but worry your credit is holding you back, let CarsDirect take the lead. We help consumers by matching them to local dealerships that have the lending resources available to get them the financing they need. The process is quick, easy, and free. Simply fill out our auto loan request form, and we’ll get right to work matching you with a dealer in your area.

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Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.


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