Long-term loans like car loans are often hard to pay. You will get a 3 to 5 years plan to pay the loan and missing a single payment will get you trapped in such a way that you may not be able to get rid of the loan quickly. Many individuals are dealing with the car loan issue. They are in search of a way that will help them to get rid of the loan.
It has been noticed that loans are the biggest reason why most people are suffering from financial crisis. A huge part of their income goes to the payment of loan installments so they are unable to meet up with some of the important necessities of life.
Some people often have to take other small loans to assure that they can pay for other expenses. This is the reason why their circle of loan never ends. It is better you get rid of the car loan before you can consider having another loan. To help you out we have prepared some special tips.
1. Make one-time payment
The fastest and best way to get rid of the loan quickly is to make a one-time payment. If you are lucky, you may have enough money to make this move. It has the following benefits:
- You get rid of the loan in a single payment
- It allows you to pay the entire interest so that you will not have to deal with it again
- The amount of interest on loan might be higher in a single payment but it is better than paying monthly payments
- You might get a little discount from some lenders for a single payment
2. Bi-weekly payments
Making bi-weekly payments, you can better control your expenses. It is always easier to pay smaller amounts every two weeks and do not worry about saving money for the whole month.
3. Add a little extra to your payments
In case your lender does not offer you any quick payment options, you can use another method. All you have to do is to add a little extra amount to your monthly payment. Let us say you have to pay $300 every month for your car. If you can manage to add an extra $25-50 for your car loan each month, you will be able to pay off your loan faster and be debt-free.
4. Refinance your loan
There are chances that terms on your car loan are not very favorable. In addition, you might have been able to get enough money that will allow you to pay the loan quickly but your lender is not providing the option. In this situation, you can refinance your loan by seeking out a new lender. Find a lender that will offer you the one-time payment option. In this way when you refinance the loan it will be easier for you to pay off the new lender in a single payment.
5. Sell the car
In case of earlier options provided do not work for you, the best option would be to sell the car. When you sell your car, you can easily pay off the loan with the money that you got from the sale. This is the quickest way for you pay off your car loan early.
Bottom line
When you are planning to apply for a car loan it is important that you consider all the options you have available. There are chances that you may be planning to make a one-time payment but your lender will not give you that option. In this situation, you will be stuck with regular payments. It is very important that you clarify the services and payment methods that you want so that you will not have to deal with any issues in the future.