3 Ways To Pay Off Your Car Loan Faster

Posted by on September 30, 2019 @23:47:52 EDT

No matter how much you may love the vehicle you’re driving, there’s no getting around the fact that the car loan in Toronto you’re paying back is probably a little irritating. After all, it can often make up the bulk of our monthly expenditure, and the severe consequences for missing payments are enough to give even the calmest among added stress.

In an ideal world, car loans in Toronto wouldn’t need to last any longer than a couple of weeks to pay back fully, but that’s not the reality. In fact, most loans tend to last between 48 and 96 months, so you can expect to get used to the fact that you’ll need to make the payments every week.

However, there are a number of easy-to-apply strategies you can use in order to pay off your car loan a bit quicker. While none of these are going to drastically reduce the total amount of the loan, they are all going to help a little—and if you can make them into habits that stick, you’ll have your car loan in Toronto paid off before you know it.

Here are the top 3 things you can do to pay off your car loan that much faster.

1: Secure Some Extra Cash

A woman holding some banknotes.

While it may sound a little dubious (who wouldn’t want some extra cash?), hear us out on this one. Getting some extra cash to spend on your car loan in Toronto may well be much more possible than you think it is, especially if you’ve never looked into the possibility before.

A good way to start is by selling things you don’t need. Amazon and eBay are great ways to turn all that stuff lying around your home into a little extra change, which can go a long way in the overall scheme of a long-term car loan. Books and clothes are both super options, because everybody wants them and because they’re not very heavy, so shipping won’t set you back too much.

The idea is to spend any extra money you have on your car payments, within reason. We don’t recommend taking money away from the essentials—this is strictly for disposable income.

If you already have a side hustle, consider re-routing some of that money towards your car payments—and if you don’t, check out this piece for some great ideas. It might not be as immediately fulfilling as a meal out or a new gadget to play with, but once your loan is paid off you’ll be really glad you took this step.

2: Try To Make Bi-Weekly Payments

More often than not, car payments aren’t financially crippling, or at least they certainly shouldn’t be. If you’re able to comfortably hit your payments as matters currently stand and still have money left over, it might be a good idea to think about switching the payment plan on your car loan in Toronto towards a bi-weekly structure.

The idea isn’t to double the amount you’re paying per month. Rather, what you want to do is pay half the amount every two weeks, instead of the full amount once per month. There are two main advantages to a bi-weekly payment plan in terms of finances, and they’re both long-term, sustainable improvements over a standard monthly automobile loan deal.

The first is that you’ll actually be making an extra payment per year, given that there are 52 weeks, but only 12 months. It sounds sort of strange, but those extra few days per month coalesce into a total extra month by year’s end, so by paying bi-weekly, you could find yourself shaving a few months or more off your total loan term.

The second advantage is that less interest will build up because you’re making smaller payment amounts twice as often as a larger amount once a month. The less interest you have to pay, the more of your money is going directly towards the value of the vehicle, which leads to a happier financial situation all-round.

3: Round Your Payments Up To The Nearest Hundred

A calculator, a pen, and a pad of paper.

This step may not be possible if you’re stuck for cash, but if you aren’t, it can be a really easy way to speed up the total amount of time you’ll spend paying for your car loan in Toronto. The logic behind this technique is straightforward, and once you get it going, you’ll be amazed by the results.

The idea is to round every payment up to the nearest hundred. For example, if you’re paying $378.54 every month, just pay $400 instead. In all likelihood, if you’re managing to make payments for a car you’re not really going to miss that extra $21.46. You will notice it, though, once the end of the year comes along and you’re already three or four months ahead of schedule.

It’s a painless way to put some extra money towards your car payments, and it’ll also make balancing your budget month by month that much easier, because nice, round numbers are a lot easier to factor into calculations. While it won’t be a good option for you if you need every last dollar, if you’re relatively comfortable in your financial situation, this is probably the single best way to speed up the amount of time left on your car loan in Toronto.

In Conclusion

So there you have it: the top 3 ways to pay off your automobile loan a bit faster. Of course, it would be great to be able to apply all of these; and if you can, congratulations! You’re in a good spot and should have that car all to yourself in no time.

Even if you can’t, however, putting just one or two of the above tips to work will have a noticeable effect on the total amount of time you spend paying off your Toronto car loan. As with anything financial, the key is to make small, good decisions with regularity. Don’t forget that it’s a marathon, not a sprint.

It can often be really difficult to secure approval for a car loan if you’ve got a bad credit score. Did you know that here at Autoloans.ca we don’t prioritize customers with better credit scores? Every application we receive is given the same amount of time and attention, so if you’ve been having a tough time, why not send us an email? We’d love to help you out in any way we can.

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