880 Walkers Line, Burlington, ON, L7N 2G2, Canada

4 Tips for Paying a Car Loan Faster in Cayuga

4 Tips for Paying a Car Loan Faster in Cayuga

Want to pay off your Cayuga auto loan faster? Want to free up some cash each month for something else? Want to upgrade your car but want to settle this loan first? Our Cayuga auto loans team outlines some tips for paying a car loan faster without having to break the bank account!

 

Paying a Car Loan Faster

 

You don’t have to be rich or have lots of spare cash each month to repay debts faster. All it takes is a little organization and these top tips.

 

With all these tips, make sure to specify with the lender that all extra payments are to come off the loan principal and not the entire payment. You want to be paying back the money you owe and not the interest!

 

Check you can repay faster

 

Most auto loans don’t use early settlement penalties, but some do. Some lenders will charge a fee if you repay within a year or two, or make any overpayments.

 

Before starting out, check your auto loan to make sure it isn’t one of them. It should be mentioned explicitly in the contract. If you don’t read legalese, contact the lender and ask.

 

Overpay each month

 

Making overpayments each month is a simple way to pay your auto loan faster. You generally have two ways to do this, round up or pay fortnightly.

 

Rounding up takes your existing monthly payment and rounds it up to a whole number.

 

For example, your current auto loan is $285 per month. You could round it up to $300 for a small overpayment or go up to $350-400 for a more significant overpayment.

 

Paying fortnightly or bi-weekly takes your normal monthly payment and splits it into two. Paying like this slightly reduces the interest for the second fortnight per month and means you’ll be making 13 monthly payments per year instead of 12.

 

Lump sum overpayment

 

Lump sum overpayments are useful if you get a bonus with work or come into money somehow. It’s also a good use of a tax rebate should you get one.

 

Lump sum overpayments are typically in the hundreds or thousands of dollars and are made as a single payment.

 

You would typically have to contact the lender to arrange a single lump sum payment.

 

Save and settle early

 

Saving up and settling the loan early works a lot like a lump sum overpayment. You save as hard as you can, contact the lender for a settlement figure, make that payment to settle the loan.

 

This isn’t something everyone can do but if you’re one of the lucky ones, it is entirely possible. Don’t guess at the settlement figure though.

 

Get an idea of what’s outstanding, save up that amount and get an accurate settlement figure from the lender. Then pay that amount. Anything left over can go into savings or be used as a down payment on your next auto loan.

 

Paying off your Cayuga auto loan early is possible for everyone, regardless of financial situation. Even overpaying by $20-50 per month will help settle the loan early and could knock hundreds of dollars off the interest.

 

That has to be worthwhile!

 

We will use all our skill and experience to deliver the lowest possible Cayuga auto loan rates, guaranteed. Contact Car Nation Canada Direct to learn how we can help.

 

Thanks for reading. Be sure to connect with us on Facebook, Twitter, Instagram, or LinkedIn to stay up to date on our latest great articles!

Categories: Auto Loan

Tags: ,