Paying off a car sooner?

[abowers]

Re: Paying off a car sooner?

My new car payments are $265/month with a 4.9% interest rate. I've been sending in just an extra $20-25/month since we financed the car in October. My minimum due is dropping every month, but I continue to send in the same amount, so that in a few months I'll be ahead by a payment. They take whatever money I send them. This is with Ford, by the way.

[Tree0164]

Re: Paying off a car sooner?

You can send in extra each month. I have a monthly car payment of $244 but I pay $300 each month towards it and I will end up paying it off about 6 months earlier.

[xMoneyMakerx]

Re: Paying off a car sooner?

Cool, If I would've known this before I would be way ahead in payments, I always figured I had to give large amounts extra for it to make a difference. I am now motivated to paying off my car sooner. THANKS EVERYONE!

[xMoneyMakerx]

Re: Paying off a car sooner?

o.k. I had another questions regarding extra payments, but didn't know if I should start a new thread or not. Anyway, I have my car financed with ford credit and have been using e-bill to pay my monthly bill. My question was how do I give extra payments with e-bill? or should I just mail in the extra payment? Any info will be greatly appreciated! Thanks!

[Broken Arrow]

Re: Paying off a car sooner?

Are there any fine print or FAQ articles available on the website? My student loan website has it, and it involves me doing nothing more than transferring an amount larger than the minimum.

[xMoneyMakerx]

Re: Paying off a car sooner?

There's some faq's but I don't know if I missed it, but I didn't see anyting regarding extra payments, Ill check again, thanks!

[abowers]

Re: Paying off a car sooner?

i have ford too - but I pay online but through my bank (not the ford website) so i just enter in more than my monthly payment.

[veronak]

Re: Paying off a car sooner?

"No question is a dumb questions" but to answer your question, sending in $100.00 extra a month will help you pay off the car sooner my mom did that and paid off her car almost two years early

[jesmeg32]

Just a thought but if you are sending in extra money make sure that it is going towards your principal and not your interest. I was told by a teacher once that unless you specify many lenders will put it towards your interest first -- which basically is wasting your money. If your put it towards the principal balance then you are paying off a portion of your loan that has not yet had interest calculated against it which is why that helps you pay off the loan faster.

[Hedy]

Just a thought but if you are sending in extra money make sure that it is going towards your principal and not your interest. I was told by a teacher once that unless you specify many lenders will put it towards your interest first -- which basically is wasting your money. If your put it towards the principal balance then you are paying off a portion of your loan that has not yet had interest calculated against it which is why that helps you pay off the loan faster.

Check your loan info-I know Nissan has a special pricipal payment address.

[Scanner]

1. Check the terms of your loan to see if pre-payment is allowed and what the terms are if you do.

2. If it's allowed, then yes, it's a no-brainor - in effect, you are getting a 12% no-risk return on your money every month Nobody here gets 12% no-risk return.

3. I am not sure that selling it (dumping it) or refinancing is the best option. You have probably hit a good part of the depreciation. If the car is a "keeper", I would be just bite the bullet and just pay it off vs. liquidating it. The only exception would be if you were like my sister - a true urbanite, content to live near work and pleasure (art museums/cofee shops) and would be content to take the train, subway and bus the rest of her life. Most of us are not wired like that though and need dependable, individual transportation.

Good luck.

[kilcher]

This is what I've done in the past... Put the extra money in savings. That way it's there if you need it. Then, when you have enough, go ahead and pay off your car loan. The difference between the interest you're earning vs. the interest you're paying shouldn't be that much.

[ktmarvels]

There are a bunch of calculators to help you see how applying even a small amount of money will help pay off the car faster.

Bankrate's seems like it has some good info: Loan calculator: Bankrate.com

This one from LotPro gives you the same information, but it takes a more graphical approach: Auto Loan Payoff Calculator. Payoff your Car Loan Early