Sometimes, doing the math makes you angry.
Realizing that once it’s finally paid off, you will have paid over $5,000 in interest in addition to your auto loan can be just the jolt and motivation needed.
Now you’re ready to figure out how to pay off that loan ASAP.
We’re here to help you do just that, and have some tips and ideas to get you rolling.
Now, everyone’s situation is different. But we’re going to do our best to highlight some of the quickest ways you can put the pedal to the metal, and pay off that loan.
Pay More Than the Minimum Due
Obviously, right? The big question now is, “cool, but where does that extra money come from?”
The first thing to ask is, where can you cut back?
Coffee, happy hour, and restaurants are something financial experts always point their fingers to first, telling people to stop indulging in fun. There’s no room for it when you’re on a budget
Whether you choose to do this or not is up to you. Maybe cut back for a week, if that feels more doable.
Paying off something faster shouldn’t be at the expense of your overall well-being.
Another area to consider is subscriptions to things you no longer use.
A $14 subscription to a streaming account may not seem like much, but if you have three of them, that’s $42.
Do you have a gym membership that you keep paying for, intending to use someday?
Do you tend to impulse buy, tossing extras in the cart because you only shop when you’re hungry, and thus usually deviate from what’s on your list?
There are so many little small ticket items that may not seem like much, but it all adds up.
For more insight, take a peek at your receipts and check your bank and credit card statements.
Make Some Extra Cash
Earning some extra cash, and then plunking that on your car payment is an excellent way to get that loan in the rear-view mirror.
Do you enjoy trivia and socializing? Sign up to be a quiz master at a pub quiz.
Do you play an instrument? Become an instructor, or see if you can play at casual events. Adding to the atmosphere as your fingers fly over the strings of your acoustic guitar.
Do you have too much stuff, and could do with purging some of it? Sell your items on eBay, or have a garage sale.
Cruise thrift stores for items people are looking for, say vintage or designer pieces, and sell them on eBay.
The point is, there are a ton of ways to make some extra income. An additional $50 a week may not seem like much, but adds up to an extra $200 on your next car payment.
Put your Car to Work
Another easy way to make some extra money is to become an Uber or Lyft driver. You get to make your own hours as you transport people around.
All the extra money you make can then be put toward paying off your loan.
However, there’s one thing that many don’t consider when they decide to offer their services in the rideshare industry, and that’s the worst-case scenario: if you get in an accident while transporting a passenger, and they get injured, who’s liable? JT Legal Group has a very insightful article that discusses all of that in depth.
If bad credit landed you with a high interest rate and your credit score has gone up since, or if you think you could get a better interest rate, consider refinancing your loan. Paying less interest means more goes toward the principle.
Tax Returns and Bonuses
If you get a tax return or bonuses at work, put that money towards paying off your loan. There is always the temptation – borne of instant gratification – trying to coax us into spending money on something else. However, understanding the freedom that comes with not being in debt, the feeling of owning something outright, that’s something that you’ll ultimately feel better about. Your future self will thank you.
Make Bi-Weekly Payments
Paying half of the loan every two weeks, rather than the full amount monthly, means that instead of 12 payments per year, you’re making 13.
Many people get deterred when they see a huge figure they have to pay off; the number can feel daunting and insurmountable. Which makes the truth of the matter easy to forget: every little bit counts.
Hopefully these suggestions helped and inspired you.
And if you’re able to do a little in, say, three or four areas of life, that little is transformed to something bigger. Something that makes an impact.