Schaumburg drivers who choose to finance their new or used car with an auto loan will have a set monthly payment amount that they must adhere to in order to pay it off in time. But what if you’d like to pay more than your monthly payment amount? Can you pay off a car loan early? Yes, paying off a car loan early is a viable option for many Streamwood individuals.
In this guide, the finance team at Biggers Chevrolet covers the following topics:
Get help determining whether you should start working toward the goal of early car loan payoff and explore some tips to help you get there, below!
Paying off a car loan early can award you many benefits. Chief among them: saving money on interest. Keep in mind, the answer to “Does paying off a car loan early avoid interest?” is not that it helps you outright avoid interest, but that it can lower the total interest paid by a significant amount. As your car loan balance decreases each month, the amount of interest you pay decreases a bit, too.
For example, paying an extra $50 per month on a $15,000 five-year car loan with a 7% interest rate could save you a total of $487 in total interest paid.
It takes good financial planning and a lot of diligence to pay off a car loan early, but you’ll be rewarded with lower interest paid overall, decreased chances of becoming upside down on your loan, a lower debt-to-income ratio, and you’ll be one step closer to financial freedom.
There are a few methods you can follow to pay off your car loan early. Take a look to determine which route makes the most sense for yourself:
Is it good to pay off a car loan early? For many Bartlett drivers, the answer is yes! If you’d like more information on how paying off your car loan earlier than planned can save you money, contact us at Biggers Chevrolet. We’re always happy to provide car buying tips like how to calculate auto loan interest and more that you can trust!
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