Car loans are never fun to pay, but you need your car to get you to and from work and your other obligations. If only you could pay off your car note faster and more efficiently, but the concept seems almost foreign. You’re already paying so much on your car loan, and it doesn’t seem possible to make additional payments. Rather than making additional payments or finding a lump sum with which to pay off your vehicle, use one of these six budgeting tips to help you pay off your car faster.
Do you pay for a magazine subscription or other subscription you don’t use? For example, do you pay for XM satellite radio even though your kids watch movies in the car and you’ve never used your XM? Why not cancel those useless and unused subscriptions? Take the money you were wasting on those and add it to your car payment each month.
Negotiate with Creditors
Call the cell phone company, your creditors, and even your cable company to see if they’re willing to negotiate a better monthly price. Many will do this if you’re a good customer with a good payment record. If you threaten to go elsewhere, they might do the same. Use your savings toward your bigger car payment.
Choose Smaller Plans
Cancel the items you’re not using such as your movie channels via satellite or your additional data on your cell plan. It’s extra money every month you can put toward paying off your car. It’s a great way to find more money without getting rid of things you really need or want.
Round Your Payment Up
Make bigger payments every month. Just because your car payment is $531 doesn’t mean you can’t round it up to $550 or $600 each month. That little extra goes a long way toward paying off the principal balance and lowering the amount of interest you pay.
Pay Every Other Week
Bi-weekly payments are exceptionally helpful if you can afford them. Essentially, you’re paying double the car payment every month, which is going to pay off the interest fast. This helps lower interest, and it allows you to pay off your car in half the time.
Use Additional Funds
Do you get a tax refund every year? Do you get a check from your utility company every year for overpaying your flat rate throughout the year? If you get any money you’re not expecting, send it to your lender to help you pay off your car loan faster. You’d be surprised how much you can pay off using this method.
Your car loan is not one you want to pay, but it’s one you can easily pay off faster. There are numerous ways to adjust your budget to fit a higher payment and a faster payout. Try one or more and see how much faster you can pay off your car.