How to pay for a car in advance and save money

Posted by

The family traveling by car paid early - pay for a car

Think about what you could do without automatic payments in your budget. Take more vacations, enjoy more nights out, or build up some savings for the future, perhaps. Whatever it is, pay your car up front and not only do you have that debt behind you, but you may also have been saving decently on interest. *

There are several common approaches to prepay a vehicle, focusing on the following:

  • more frequent payments
  • regular extra payments
  • an occasional large payment
  • a combination of the above options
  • refinancing

Start by familiarizing yourself with the details of your current contract, such as the amount, duration, and annual percentage rate, to help you calculate a profit. Most retail installment contracts are structured using simple interest, in which interest is calculated daily on the residual capital. This is important because the faster you pay the principal, the less interest will accrue and the lower the charge will be. Also check if your current lender imposes prepayment penalties for an early repayment, which would affect potential savings.

5 ways to pay for a car faster

1. Pay every two weeks

Some lenders allow you to make half of the biweekly monthly payment, which means that you will make 26 half of the payments during the year and actually add an extra full payment every 12 months. Since you are paying more regularly, your overall interest will be reduced. You will also be able to save several months on the time it takes to pay off the debt.

2. Add more to your payments

Use a car loan payout calculator to get an idea of ​​how adding extra money to your monthly payment can help. Enter the price you paid for the vehicle, the down payment, the APR, the duration of the contract and the number of months remaining. Alternatively, simply enter the original amount of the banknote in the vehicle price field, without having to enter the deposit as well.

You can then type in a dollar amount as an additional monthly payment to see how many months the repayment period is reduced and what the interest savings could be. Changing the additional payment will indicate how quickly you may be able to pay for the vehicle.

Here is an example:

Enter an amount of $ 25,000 with a term of 72 months, 5% April, and 36 months remaining. Help him out of $ 100 as an additional monthly payment, and the calculator estimates the time it takes to pay off the car is reduced by seven months, along with a total interest savings of $ 220.

Increase the extra payment to $ 200 per month, and not only was it cleared for a full year, but $ 364 in interest expenses was potentially saved.

3. Make a large payment

You may be able to pay part of your note with a large sum from time to time or annually, perhaps with a tax refund.

Alternatively, you can settle the outstanding balance in one go, for which you will need the payment amount. You can usually request this amount from your lender by calling a customer service agent, visiting a branch, or going online. It may differ from the current balance of the note if more interest accrues before receiving the statement.

Other factors can also make a difference in what you pay, such as a prepayment penalty, contract changes, including a term extension, and any outstanding payments, fees and deferred charges.

Once the payment amount is obtained, there may be a specific date for the payment and preferred steps for the lender to receive it. Sometimes, the exact payment will depend on the day the payment is received. You can check the process with your lender and work with them to pay exactly what is owed.

Customers who have purchased a car with RoadLoans and whose contracts are supported by Santander Consumer USA (SC), can enjoy a simple and penalty-free prepayment process.

4. Refinance

Refinancing for a shorter loan term and a lower APR is another effective way to pay off a car faster while also saving on interest. If your credit score has improved, interest rates have dropped, or you didn’t get a great deal the first time around, this may be the way to go. The shorter term will increase your monthly payment, so consider using a refinancing calculator to evaluate what might work. When you are ready for to apply, RoadLoans offers a simple online application and immediate decisions. However, we do not accept applications from existing SC and Chrysler Capital customers.

5. Maintain good habits

Whether you’re transitioning to a bi-weekly payment routine, increasing your monthly payment, or refinancing, paying on time will avoid potential late and missed payment fees that could slow your efforts to pay off the car.

Getting to an advance of earnings

Buying a vehicle is one of the biggest purchases we make in life and paying for it upfront can bring great rewards along with potential savings. With the many options available, think about what changes your budget can accommodate and what offers the most benefits.

* These statements are informational suggestions only and should not be construed as legal, accounting or professional advice, nor are they intended as a substitute for legal or professional guidance.

RoadLoans is not a credit advisory service and makes no representations regarding the responsible use or restoration of consumer credit.

This article was published by: Rob Looker by title: How to pay for a car in advance and save money

If you like the information in this article, please write your opinion in the comments column.

Column comments available for discussion, sharing ideas and knowledge. Respect other readers with good and polite language. Stay on topic. Do not attack or spread hatred against certain ethnic groups, religions, races, or groups. Think carefully before posting a comment.

Please write your comments according to the topic of this news page. Comments that contain SPAM! will not be displayed until it is approved by our team.(comment nicely and politely)

IMPORTANT!!! If you want to take content from our site, please include the source of our article My Loan

Tim Editor: Omar, Shaqueena, Bilqis

Leave a Reply

Your email address will not be published. Required fields are marked *



There’s no content to show here yet.