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Can I Pay Off My Vehicle Loan Early?

Car Loan

 

If you have an auto loan and are wondering can I pay off my vehicle loan early? You have come to the right spot. Bridgeport drivers ask us all the time at Garavel CJDR when they are looking to exceed their contractual monthly payments. Thus, the answer is yes to paying off an auto loan early is doable! Let’s find out what happens if you pay off a car loan early? And is it good to pay off a car loan early? Contact us for more information!

Is it Best to Pay Off a Vehicle Loan Early?

Is it good to pay off a car loan early? Absolutely. However, it does take some planning unless you have come into some extra income. Not only is it good to pay off a car loan early to reduces financial stress, but it also lessens the chance of becoming upside-down on your car loan, lowers interest paid, and reduces the debt-to-income ratio. 

When Paying Off a Vehicle Loan Early is Ideal

Many Greenwich drivers choose to pay off an auto loan early and here are some of the reasons why:

  • Financial freedom to allocate money spent on paying off your car loan to other expenses.
  • You have encountered additional funds to make larger car payments without touching funds for emergency and savings.
  • Your goal when lowering monthly payments is to retire happily in Stamford
  • You want to decrease your debt-to-income ratio

When Paying Off a Vehicle Loan Early Isn’t Ideal

  • You have no savings or an emergency fund.
  • Exceptional interest rates make it sensible to continue paying on-time car payments.
  • You don’t have many additional emergency funds set aside
  • To build your credit score and build your credit history.
  • Prepayment can have a penalty to it with some vehicle loan agreements. Check with your financing team or lender.

How to Pay Off a Vehicle Loan Early

Paying off an auto loan early offers you plenty of routes. Check with your lender prior to making any additional payments to not only see if it is doable but to find out your options. Some options include:

  • Bi-Weekly Payments: Split your monthly payment in half and pay bi-weekly. Therefore you will pay thirteen months instead of twelve months.
  • Round-Up Monthly Payments: Round up your monthly car payments to the nearest $50, etc.
  • Make One Extra Yearly Payment in One Lump Sum: Pay a one-time lump sum a year to maintain the same interest savings.
  • Avoid Skipping a Payment: Do not get tempted if you are allowed to skip one or two months of a car payment. You will only add more loan interest and extend your loan term.
  • Refinance with a New Vehicle Loan: After one or two on-time yearly payments you may qualify for refinancing. You only want to refinance your car loan if it decreases your interest rate. If it does, your monthly car payment will have lower interest rates.

Discover More with Garavel CJDR Today!

Can I pay off my vehicle loan early? Yes. You also now know the benefits if you pay off a car loan early as well. Allow our finance team to help you choose the best option for paying off your car loan early. Visit us in Norwalk and check out our new vehicle specials online!

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