Trying to pay my new car off in less than a year?

Question

I'm currently a contractor in Iraq and in the year I've been here, I've paid off everything I've owed on-- except the new car I purchased last month. I've heard making 2 payments a month will split the interest + principal. Is this correct and what is the best way to pay off a car ASAP

Answer 1

What you need to do is write two checks. One for the payment amount and the other that you write"To Principle Only" on the bottom left memo portion. Then the lender must put that total amount towards just the principle. That will help pay off the loan sooner.

As long as your loan is a true auto loan and not a personal loan secured by the car, you can pay it off at any time. There are no penalties for it. In fact, you'll save on the amount of interest owed by paying it off early.

While lenders prefer that you keep paying for the entire time, they don't hold it against you at all if you make a quicker payoff. In fact, many prefer it. They get their money back sooner and still make something off you in finance charges. And you prove that you're a great risk. Not a bad risk. Your interest rates will always be "preferred".

Go ahead and write two checks each month. Follow my advice and you'll have it paid off in no time and rock solid credit.

Answer 2

Check with the finance company about how to make an early settlement, they may not be to keen on making a deal as they make their profit on your repayments.

However paying off the loan early will save you money and won't hurt your credit rating.

Good luck!.