Car loans can put quite the crimp in your financial situation, so it is best to rid yourself of these payments early if at all possible. When you are trying to pay off a car loan early, the key cog happens to be right before you make your purchase in the first place. Doing all of the requisite research prior to buying the car will start you off on the right foot.
Many people make crucial mistakes when the are shopping for big ticket items, such as vehicles. The best idea is to secure a personal loan prior for the amount you are willing to spend, and able to afford. Once you have this loan approved, then you can begin to find a car to your liking and negotiate a price that fits within the confines of the personal loan.
If you go our car shopping prior to getting a personal loan, you will tend to look at vehicles that do not fall within the desired price range for your personal financial situation.
Once you are in possession of your vehicle, and you did not fall into the car dealership traps of zero percent financing or long-term loans, which are ticking time bombs, you can start to make your monthly payments. Simply making the monthly payments is not enough if you wish to pay off your car loan early.
The major notion of paying off a car early is to put extra money on the principle. Many unscrupulous institutions will apply any extra monies either onto the interest, or onto the next monthly payment. This will not help you to pay off your car early, so be one hundred percent positive that the extra money you give goes entirely towards the principle.
In order to pay off a car early, you need to loosen up some extra money. This can be achieved through myriad ways, depending on your financial situation. If you get an extra part-time job, perhaps moonlighting as a taxi driver or a bartender, then you can directly use all of that money to pour directly onto the principle of your car loan and eliminate some payments down the road.
Figuring out ways to save money everyday can be rather simple. If you start to brew your own coffee at home rather than stopping at your favourite coffee shop in the morning or on break at work, then you will be able to save at least $50.00 per month, and more if you drink more than one cup per day. Also, cut back on some other expenses, such as reducing your gas purchase by car-pooling to work even a few days per week.
Have a drink at home as opposed to going to a pub, and eat out less often. If you keep track of these savings in a spending journal, you will be able to then apply the balance to your car loan, and help to pay it off early.
No matter what your situation, paying off a car loan early is a great idea. Many people simply make the standard payments, and are content to pay off the car in the allotted time frame decided upon by the car dealership or lending institution. If you wish to wrest some control away from these conglomerates, then take the matter into your own hands and pay your car off early.