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Pay Off Your Auto Loan Early with These 5 Tips7/2/2019

Imagine paying off your auto loan earlier than you planned, calling your car your own with no strings attached. Once you complete your payments, you can use the money you saved for your auto loan on other bills, your mortgage, or treat yourself. Sounds like a dream come true, right? If you want to fulfill that dream of paying off your auto loan early, here are a few tips on how you can.

  • Refinance your loan: Speak with your lender about refinancing your loan. By doing this, you can see about paying off your loan in a shorter time frame at a low interest rate. In fact, if your auto loan is with another lender, we’d love for you to bring your auto loan to Extra Credit Union and we’ll beat your current rate by 1 percent—if not more {some restrictions apply}.
  • Make or review your budget: You’d be surprised at how many people don’t have a budget to keep track of things they’re paying for. Make a list of your monthly expenses from bills, utilities, savings and spending money. Next, write down how much each item costs. Factor in how much money you make, whether it be weekly, biweekly, or monthly. You can decide how to divide your paycheck among your expenses and have enough to pay on your loan. If you have a budget, take another look at it to see if you can reduce the amount of money you use for spending or entertainment. The money you save with your budget will help you in the long run. Put some of this extra money toward your auto loan payment each month to pay it off faster.
  • Live an affordable lifestyle: Try not to live outside your financial means. Limit the amount of days a week or month you go to restaurants to have dinner or buy a morning coffee. Buying things in bulk will save you from having to spend money on groceries every week. Coupons, whether paper or online, will help you save money on groceries. Don’t be afraid to check out manager specials at local grocery store—you’d be surprised what good deals stores have. You can cut your bill in half—sometimes more—when you look at clearance racks in clothing and department stores.
  • Put your tax refund, bonuses and pay raises to good use: Any additional income you have can be set aside to pay your auto loan.
  • Try to find other means of income: There are some people that don’t get bonuses or pay raises as often as others. You can consider a second job if you need to supplement your income. If work-life balance allows you to take a second job, then use that extra income for your monthly payments.

Though some of these steps might seem trying at first, in the end it’s worth not having the weight of your auto loan on your shoulders. You can use the money from your monthly payments and put that sum toward something that’s important to you or to start paying down other bills. Follow any, or all, of these tips and they will move you closer to that dream of paying off your auto loan early.

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