If you’re feeling a little overwhelmed by your car loan payments, here are seven ways to make them more manageable.
1. Consider refinancing
If you’ve had your car loan for a while and your credit score has improved, you may be able to get a lower interest rate by refinancing. This could save you a lot of money over the life of your loan. Refinancing essentially involves taking out a new loan to pay off your old one. Refinancing can be a good idea if you’ve recently improved your credit score or if interest rates have gone down since you took out your original loan. If you’re considering refinancing, check out a car finance comparison website to ensure you’re getting the best deal.
2. Renegotiate your interest rate with your lender.
This may not always be possible, but it’s worth a shot if you’ve been a good, consistent customer. It never hurts to ask. If you’ve improved your credit score or if there’s been a change in market conditions, your lender may be more willing to work with you.
3. Make extra payments
If you can afford it, making extra payments can help you pay off your car loan sooner. This will reduce the amount of interest you pay over the life of the loan, and will mean that you owe less money. You can make extra payments either by adding them to your regular payment or by sending in a one-time payment. This is a great way to get ahead on your loan if you have some extra money.
4. Try a car loan consolidation loan
If you have multiple car loans, you could save money by consolidating them into one loan with a lower interest rate. This can be done through a car loan consolidation loan, which is essentially a loan designed specifically for this purpose.
5. Sell your car and buy a cheaper one
This may not be an option for everyone, but if you have a car that’s newer and/or more expensive than you need, selling it and buying a cheaper one could save you a lot of money each month on your car loan payment.
6. Trade in your car for a less expensive model
If selling your car isn’t an option, you may be able to trade it in for a less expensive model. This could lower your monthly car loan payments and help you get out of debt more quickly.
7. Round up your payments
If you can’t afford to make extra payments, you can still shorten the life of your loan by rounding up your payments. For example, if your monthly payment is $300, you could round up to $325. This may not seem like much, but it can add up over time.
Making your car loan payments more manageable doesn’t have to be difficult. By considering these options, you can find a solution that works for you and helps you get out of debt more quickly.
Whatever route you decide to take, be sure to consult with a financial advisor to find the best way to manage your car loan payments.