Today, more lenders are easing the borrowing terms to make loans available for more borrowers. Since lenders allow borrowers to pay on loans over extended periods, they can spend 84 months servicing a single one. For example, car loan borrowers can spend seven years repaying a single loan.
The more time you spend before completing loan repayment, the more interest you’ll have paid by the end of the payment period. Therefore, it would be a great idea to pay off an auto loan early to avoid accumulating interest over an extended duration. The following are ways that you can use to repay your car loan quickly.
Refinance
Refinancing could be the best option if your credit score increases before completing the car loan repayment. You could end up getting better terms and a reduced payment. While looking at the various refinancing options provided by your lender, don’t forget that you need to finish paying the loan fast.
Instead of choosing an option to refinance your loan within 72 months, go for one with fewer months and a lower interest rate. However, if you refinance a long-term loan, try to pay an extra amount each month to repay the loan quickly.
Make Bi-Weekly Payments
If you pay your auto loan every two weeks instead of once each month, you’ll make more payments each year. Since some months have more weeks than others, you’ll have made one extra payment each year to pay your car loan bi-weekly. You will also reduce the interest you pay by completing the loan. You’ll reduce the remaining balance faster than if you repaid the loan in monthly installments.
