Any time you’re trying to pay down a big loan, it can seem like you’re in over your head and that you’ll never make positive strides towards getting it off of your plate. Everyone wants to pay down that loan faster, and eliminating your car loan requires a degree of responsibility, dedication, determination, and a solid plan of action to move forward.
Whether it’s to improve your credit, to reduce debt or to get a new car, you can pay your loan faster if you take the right steps. Discover a few tips to pay off that installment loan for your car faster, so you can get out of debt or get onto trading up to your next new vehicle!
Round up Your Installment Loan Payments
Is your monthly payment $324 per month? If so, why not pay $330? You won’t miss the extra six dollars a month, but it will be baby steps towards paying down the loan. Why does this work? That extra six bucks you pay actually comes directly off of your principal, rather than going towards interest, and every little bit helps.
Make Bi-Weekly Payments
Can you afford to make bi-weekly payments instead of monthly ones? See if you can work this out with your lender. Paying every two weeks will substantially decrease the amount you pay in interest, as it won’t compound as frequently. Paying bi-weekly instead of monthly can reduce the term of your loan by a full five months.
Make Extra Payments
If you can’t afford bi-weekly payments on your installment loan, do what you can to make a single extra full payment every year. If you can do this, you’ll still reduce your payment term significantly — in fact, by a similar amount. That extra payment will also come off of your principal and can lower your overall term by a factor of months.
Don’t Skip Payments
Every so often you may get an offer to skip a payment or two on your loan, since you’ve been a good customer. This offer will come without any repercussions and is presented as a respite for you if you need some extra cash.
Skipping this payment, obviously, means you’re going to spend another month paying off the loan, and you are still going to accrue interest for that month you didn’t pay. Never use an offer to skip payments.
Consider Paperless Options
Some lenders will allow their borrowers the option to sign up for paperless statements, or auto-pay options, including discounts if they do. If you have this option, it can substantially reduce the interest you pay, which will in turn reduce the time to pay off the loan.
Installment loans can be a great way to improve your credit, finance large purchases, and get the cash you need for emergencies. Paying them off requires diligence and responsibility. If you’re in need of a personalized finance option in Las Vegas, get in touch with Koster’s Cash Loans for information about how we might be able to help you today!