Can I Pay Off My Car Loan Early?

So, you’d like to reduce your monthly payments and save on interest on your car loan. Maybe you’re thinking about paying off the car loan early. But, is it good to pay off a car loan early? Our finance department wants our Myrtle Beach customers to make informed decisions, so let’s take a look at how to pay off a car loan early and whether you should do it. 

The Advantages of Paying Off a Car Loan Early

Is it good to pay off a car loan early for most people? That depends on your situation and why you want to pay it off early. Paying off a car loan can be advantageous if:

• You would like to free up money for other expenses
• Making larger monthly car payments won’t affect your emergency funds and other finances
• You would like to lower your monthly expenses to plan for a larger financial goal, such as entering retirement or growing your family
• You need to improve your debt-to-income ratio 

The Disadvantages of Paying Off a Car Loan Early

Is it good to pay off a car loan early for everyone? A lot of our Carolina Forest customers have concluded that it doesn’t make financial sense for them. Here are some reasons it may not be advantageous for you:

• You can’t afford to make extra or higher car payments
• You have a low interest rate and the money you’d use to pay off your loan early could be better used to create a retirement fund or for a future financial goal
• You need to build your credit history
• Your loan agreement includes a large prepayment penalty 

How to Pay Off a Car Loan Early

There are several ways to pay off a car loan early. Here are a few:

How to pay off a car loan early:

• Make one extra payment per year
• Make Bi-Weekly, instead of monthly payments – results in one extra payment a year
• Round up your monthly payment to the nearest $50
• Do not skip a payment
• Refinance your car loan if you can get a better rate. Use our online tool to figure out what your payments would be.

Let the Finance Department at Hadwin-White Buick GMC, Inc. of Conway Help

Still not sure what you should do? Talk to our finance department. They’d be happy to help. We pride ourselves on making the whole financing process easy. You can even apply for credit online. We’re just a short drive away from Red Hill. So, drop by or contact us today!