Readily available car financing solutions are making it easier for the common man in India to get on desired wheels without much hassle. The car market is evolving with a new car every month and tempting the every earning segment to hold a private vehicle in life. In spite of easy car finances and number of car segments available, we are still in a country where car purchase remains second expensive purchase after home. When you are taking the help of the car loan purchase a car, you are pledging a sizeable part of your income for a midterm or short term period. It is sensible to know how to pay your car loan faster to relieve you from the burden of financial obligations.
Pay Off Your Car Loan Faster
Refinance at lower interest rate
Refinancing car loan is always a wonderful option for the people who wanted to reduce the burden of car loan on their budget. Before considering a refinancing option, consider checking the interest rate offered by the lender; keep the term of the loan for short term to complete it quickly. Of course, this is one of the best options available if you wanted to change the terms of an existing car loan.
Consider bi-weekly payments
This is one of the smartest tricks to complete your car loan quickly. Rather than paying the EMI of car loan every month, plan to pay it off on the bi-weekly basis, by this you will be paying 26 EMIs in contrast to 24 EMIs in a year because a year contains 52 weeks. You will be able to shorten car loan tenure by 5 months.
Round Up Your Payment
You can easily knock few months off your car loan tenure effortlessly by rounding off car loan payments. There is no need to a sizeable amount of income to pay off your car loan but, you will soon be able to walk away from the loan.
Pre-pay with your bonus
If your car loan tenure is five years, you might be able to generate an additional source of income in the form of fixed deposits maturing, a bonus from the workplace , dividend receipts and much more. Rather than using this good deal of amount in addressing other unwanted expenses, use it to pay off your car loan.
Generate extra income
Unless you are occupied with the hectic schedules at the workplace, take some paid assignment to generate some extra income and pay off the car loan at the earliest.
Avoid skipping payments
Unless it becomes inevitable don’t go by the option to skip one-month car loan payment. It not only increases your loan tenure but also draws additional interest on a car loan.