Financing a car is one of the most overwhelming situations for most people. Whether the vehicle you want to secure is new or used, mass-market or premium, in the end, it is a major investment in your life, and the last thing you want is to overspend when there is a way to cut down some costs. Taking loans to buy cars is not an unusual thing. Over the life of the vehicle loan you procure, the goal is to always go for a lower interest rate. It is the best way to save yourself the hassle of paying back tons of dollars, regardless of whether you are working with an auto finance company, a bank, or a credit union. If you are stranded on how to go about saving money on vehicle loans, here are some tips and strategies to lead you on:
Check your rates
Like you would take your time to research on vehicle history at vincheck.info, spare some time to check your rates. No matter how expensive your car was, if you check the rates of interests, then paying off will not be as difficult. Don’t let time slip by without keeping tabs on interest rates, not to mention, your credit score.
Since the idea is to cut down the amount of interest you pay for your car loan, try payment splitting. The concept is about paying half of your monthly payment twice in the same month. This way, the first half of the amount will deduct the interest that accumulates in the 15 days between each monthly payment. In the end, your interest rates will dramatically go down as compared to submitting the whole amount due every once month.
Rounded Up Payments
Rounding up might have been basic math in school, but it makes a hell much of a difference when it comes to money and interest rates. If the installments of your car loan payment have strange figures, round them up to the nearest thousand or hundred. For example, if you have to pay $567, round the payment to $600. The extra dollars you spare every month will make a difference when it comes to interest rates of your vehicle loan.
Bi-weekly payment is a lot similar to payment splitting. However, you do not have to pay equal halves every two weeks in a month. The idea is to make a payment every two weeks, for the amount to sum up to the required installment. In the end, you will have made 26 half-payment annually, instead of 24, which goes a long way in saving some money. However, make it particularly clear with your lender what you are doing, since the idea is to shave off some months from paying off the loan and cut down the interest rates, not attract a penalty.
Pay more when you can
Some months are better than others, in the sense that you have more income than expected. Sometimes the reason is that you do not have a lot of expenditure, eating up lots of your income. At such times, make sure you pay more money. This tip covers more than just the rounded off figure. You can pay double or even triple the target installment for every month that you can. The quicker you clear your loan, the less you have to incur on the accrued interest. If all that seems far-fetched, determine to make one huge payment at least once in a year. This is a great idea if your loan stretches out to more than one year. However, you may need to pay the one big amount earlier on in the year, because the earlier to deduct the loan amount, the more you save on interest accrued thereof.