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Tips To Pay Off The Car Loan Faster...

02 May 2016, 12:30 PM

With more and more new cars being launched every month, the sentiment of buyers is at an all-time high. Readily available financing solutions have made things all the more easier for people to get their hands on their wheeled desires.

We’re still in a country where the car happens to be the second most costly purchase after a home. Plus when you take the financing option, you essentially pledge a sizable part of your income for a medium to long period of time. Knowing how to pay off the car loan faster therefore makes a lot of sense. Not just in pure financial terms but also in terms of the nagging thought at the back of the mind, as to how it is holding you back from pursuing other dreams.

So, if you’re one of those looking at new cars, it would be worth your time to read through till the end, and learn how you could pay off your loan responsibilities quicker than usual.

• Begin with a chat with your financier & working out a payment schedule that has you repaying part of the loan on a bi-weekly basis. You may not realize it, but this arrangement turns out to be quicker than the usual monthly payments, given how the months vary in the number of weeks in them.

• In most instances, you are likely to get a lump sum payment from one or more sources each year. This could be a bank deposit maturing, dividend receipts or even a bonus from your workplace in appreciation for all the hard work. The trick is to battle the urge to spend this windfall elsewhere & use it to pay off the car loan instead.

• Unless you’re really busy at the workplace (in which case, you ought to be asking the bosses for a pay hike), there’s a lot of scope to pick up a few paid assignments on the side. The money gained from such an endeavour could very well go towards paying off the loan on your car.

• You could even try the ‘rounding-off’ approach, wherein, one increases the monthly loan payment outgo to the nearest 5000/10000 mark. The increase may be tiny to look at, and won’t pinch much, but over time, it’ll pay off spectacularly.

The best part is that the above early-payment techniques aren’t just limited to new cars. They’re just as effective when it comes to paying off the loans on a used car as well. Sweet, isn’t it!

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