Most Americans have a car or want a car. The question is, “How will you be paying?”. Paying off a car loan should not be a difficult task. It starts with the type of car loan you choose when buying a car.
Not everyone can afford to buy a car with cash. The rest of us have to get financing, either through a financial entity like a bank or through the dealership we buy the car from.
Picking a Car Loan
Either of these options can be good for the buyer, but as is always the case with debt of any kind, it’s important to be able to pay it back as fast as possible. The folks at J.D. Byrider might give you an auto loan with excellent terms, but this is not true of every car dealer.
This is where the interest and fees come into play. Together, these two factors are the Annual Percentage Rate, or APR. That’s the percentage of your remaining loan balance that you’ll pay each year in addition to your premium payments.
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Paying Off a Car Loan
Some people think that when considering a loan, the monthly payment is the only number worth considering (i.e. “If I can afford $450 per month, I can afford this loan.”) However, the interest rate is more important, because it indicates exactly how much the loan costs. It’s the amount of money over and above the basic loan amount which you also have to pay back.
If you don’t have ample lending options available to you, this is not a crime. Lots of people have poor credit, often for reasons that are totally outside of their control. These people still need transportation, so they have to take what they can get when it comes to dealer financing.
Some dealers offer totally reasonable financing, one of which you’ll see linked above. People sometimes have a suspicion about lenders, though these industry players are closely scrutinized, and their terms reflect the risk involved in the loans they provide.
No matter the credibility of the lender in question, it’s always in the best interests of the borrower to pay back the loan as quickly as possible. This way they’ll save some interest, as well as enjoy the benefits of being debt free sooner. There are a bunch of ways to prioritize debt payments, and get debts paid off faster. This will work for all of your debts, including credit cards, student loans, business loans, and others. Being debt free has many advantages, not the least of which is getting to spend money on
There are a bunch of ways to prioritize debt payments and get debts paid off faster. This will work for all of your debts, including credit cards, student loans, business loans, and others. Being debt free has many advantages, not the least of which is getting to spend money on things, rather than on the repayment of borrowed money.
Start with weekly goals. Try to figure out how much money you can possibly save if you make big sacrifices in the way you live your life. Then scale it back just a little bit. Make a schedule out of paper and hang it on your refrigerator. Every time you hit your weekly goal, give yourself a sticker.
Perhaps you have debt reduction strategies that you prefer. The point is, whatever it takes, pay off your loan as fast as possible. It could save you thousands, or even tens of thousands, of dollars.
What about you? Do you think paying off a car loan starts with the type of car loan you choose when buying a car?