Owning your own car is a milestone that many people hope to achieve and are proud when they can. Owning your own vehicle provides you with more freedom, but the cost of purchasing a car might feel steep and like a big commitment. A new or even gently used car can cost $30,000 or more. Many people who don’t have that much cash lying around to pay for a car up front, so we usually end up getting a car loan.
A car loan will help you get the vehicle faster, but all loans have interest. This means you’ll end up paying more than the initial price of your vehicle for borrowing the money for it. Each month you’ll pay a certain amount that will go toward the principal balance, as well as money that goes toward the interest that is accruing. So, you’ll want to look for the right car loan with us here at Schmit Bros. We have many options for keeping your interest costs low while you work to pay off your car.
Here are a few ways you can start paying your car loan off faster.
Saving money isn’t easy, which is why implementing little savings tricks can be beneficial. Rounding up your payments is a great way to put more money down on your principal balance and come closer to owning your car faster. Start by rounding up your auto loan payments. Choose an amount that seems doable to you, such as rounding up to the nearest $50 or $100. If your payment is $360 a month and you pay $400 by rounding up each month, in 9 months, you’ll have made an entire extra payment on your car loan.
There are times when you may come into money unexpectedly. It could be due to birthdays, holidays, or a work bonus. Receiving this unexpected financial gain is often referred to as a windfall, and if used right, it can help you pay off your car loan faster. This type of one-time large payment can make a big dent in the money you still owe. It’s tempting to use the money to buy something you may like, but putting it toward something useful, like your car loan, can help decrease the amount of interest you pay over time.
If you’re looking to save money, you might be tempted to increase the length of your loan. This means that you’d agree to a longer period of time to pay it back. People often do this so that their monthly payments will be lower and so they can have the option to pay more when they want to. You may not be paying as much every month, but you’ll be paying a lot more in the long run.
We have many different finance options on our new and gently used cars here at Schmit Bros. Stop in today to talk to Aaron, our finance manager, and he can set you up with the best car loan possible for your situation.