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Simple ways to pay off your Ancaster auto loan faster

Simple ways to pay off your Ancaster auto loan faster

If you’re tired of paying out each month on an auto loan, you may have the option to pay it off early. Many Ancaster auto loans will allow you to settle the loan early, freeing you up to enjoy more money each month or plan for your next car purchase.

Either way, there are some simple ways you can pay off your Ancaster auto loan faster than the prescribed term.

Here’s how:

Check your loan terms

Most mainstream auto loans allow for overpayments, lump sum payments and early repayment. Not all do allow that though, so you should check your loan paperwork to see whether yours is one of them.

If you cannot find the paperwork, call the auto loan company and find out. There’s no point going further if you can’t make any overpayments!

Check your budget

Depending on your situation, you may have to make savings elsewhere to make overpayments on your auto loan. Look at your household budget and see where you can cut back and make some savings without impacting your lifestyle too much.

Add the amount you save each month onto the auto loan payment and make regular overpayments. This should reduce the term of your loan.

Overpaying your auto loan

If you want to pay off your Ancaster auto loan faster, you generally have three options. We hinted at them earlier but let’s cover them in a little more detail.

Overpayment each month – Increase your monthly car loan payment by a set amount each month. Ensuring that the overpayment pays the principal and not the interest should reduce the loan term. The more you overpay, the shorter the term becomes.

Lump sum overpayments – If you have a lump sum that you want to use constructively, many auto loans will allow lump sum repayments. Contact the lender and ask how you best go about making such a payment as each lender has their own rules.

Early repayment – If you have the full outstanding amount in savings, you can pay off the loan early using that. Contact the lender for a settlement figure and arrange with them to pay if off there and then.

The vast majority of standard auto loans in Ancaster will allow one or more of these options. If you have a specialist loan, bad credit car loan or something else, those rules may differ.

If in doubt, check with your lender and discuss your options.

If you need help or advice on anything to do with car loans in Ancaster, contact Car Nation Canada today, we can help!

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