How to Pay Off Your Auto Loan To Invest More In Your Business

Statistics show that 91% of US households own at least one car, and out of those cars, nearly 85% of them are financed through a loan or lease. That means a whole lot of us have an auto loan!

For those who budget our expenses (who doesn’t?), that car payment can be one of the biggest bills coming out of our wages each month. Paying off your loan not only opens up some funds to use elsewhere e.g. in your business, it also really helps boost your credit as well.

So, besides making your monthly payments on time or winning the lottery, what is the best way to pay off a car loan?

Check out these valuable tips for paying off your auto loan (or any other debt you may have).

Simply Make More Payments

Instead of paying your bill on the due date, pay half the amount every other week. It’s the same amount every month, helping keep things within your budget, but it helps to save interest by making more frequent payments.

While it might not seem like much at first, the interest you have avoided will add up in no time, potentially saving you thousands that you can use in your business.

Round It Up

Examine your monthly budget and determine how much extra you can pay on your loan each month. This might involve cutting out some funds for extracurricular activities, but even rounding up the cents to the next dollar will help shorten the term of your loan.

If possible, round up to the following 100 (example: round $220 up to $300), or simply add what you can afford to pay.

Combined with bi-weekly payments, this will drastically reduce interest and help you pay off that car loan even faster.

Make An Extra Payment

If bi-weekly payments aren’t possible, try making one extra payment a year. It will achieve the same results and can quickly be done with a tax return or bonus at work.

You could also divide your monthly payment by 12 and add the number to each amount to equal one extra payment a year.

Finding Extra Funds

It isn’t always an option, but if you can find a way to net some extra monthly earnings, use them to help pay off your loan.

Some people sell things they no longer need on eBay or elsewhere. Others pick up side jobs like LiveOps that allow them to work from home while creating their own schedule.

Driving for Uber is another popular option these days, with over 160,000 people making extra money in their spare time from it.

Refinancing

Use this site to find out everything you need to know about getting your credit score report. You can refinance your loan through a bank or credit union if you have semi-good credit.

If you acquired your loan from a dealership, lowering your interest rate to 3.16 or even 2.25 percent should sound exciting!

The better your credit score, the better the rate you will be able to find. If your score isn’t ideal, there are still plenty of companies that will work with those that need bad credit car financing.

Closer to Being Debt Free

What’s the best way to pay off a car loan? There is no one sure-fire option, but the tips above can really help you pay down the cost of your loan while saving you thousands in interest which can be put to better use in your business.

Making these minor changes will open up extra funds for your monthly budget, boost your credit, and help you become one step closer to being debt-free. Then you’ll want to make sure you don’t end up with a business partner with a bad credit rating as that too will impact on raising funds to invest in your business.