Home Finance 7 Smart Ways to Get Rid of Debt Faster

7 Smart Ways to Get Rid of Debt Faster

When it comes to buying a car, many people choose to take out a loan and make monthly payments instead of paying for the car outright. However, did you know that the average timespan of car ownership in the US is 79 months and that you will spend on average around 69 months paying off your car loan? That means you will probably only own your car outright for less than a year before replacing it

When it comes to buying a car, many people choose to take out a loan and make monthly payments instead of paying for the car outright. However, did you know that the average timespan of car ownership in the US is 79 months and that you will spend on average around 69 months paying off your car loan? That means you will probably only own your car outright for less than a year before replacing it. 

In the beginning, a car loan seems to be a great option because of its low monthly payments. However, you end up paying a lot more than the principal amount in the long run. So, if you could find some ways to get rid of debt faster, it would help you save a lot of money.

But how can you pay off your car loan faster?

  1. Make bi-weekly payments instead of monthly payments. By making half of your monthly payment every two weeks, you’ll end up making the equivalent of 13 monthly payments each year instead of 12. This may not seem like much, but it can shave months off your loan and save you a significant amount in interest.
  2. Make additional principal payments. In addition to your regular monthly or bi-weekly payments, make additional payments towards the principal of your loan when possible. Even an extra $50 per month can make a big difference because it means you’re paying down the principal faster and accruing less interest.
  3. Refinance to a lower interest rate. If interest rates have dropped since you originally took out your loan, you may be able to refinance to a lower rate and save yourself money. This is effective, especially if you started with a high-interest rate.
  4. Sell your car and pay off the loan. This may not be an option for everyone, but if you can sell your car for more than the outstanding balance on your loan, you can pay off the loan and be debt-free.
  5. Trade in your car for a new one. If you’re planning on getting a new car anyway, you can often trade in your old car and use the equity towards the purchase of the new one. This can help you pay off your old loan and avoid having two car payments.
  6. Review the add-on expenses in your car loan. Paying off your car loan will take more time than usual if it includes additional expenses and plans. These might include an extended warranty, guaranteed asset protection (GAP), a maintenance warranty covering car parts, vehicle service contracts, etc. So, before you add any additional expenses to your car loan, you should review all of those extras and eliminate any unnecessary ones. 
  7. Use cashback to pay off your loan. Many people use their debit cards to pay for goods and services. However, you can also earn money by using your debit card wisely. There are debit cards that allow cardholders to earn cashback rewards on their purchases. Cashback rewards are typically earned as a percentage of the purchase price and can be redeemed for cash or merchandise. Some debit cards with cash back also offer bonus rewards for specific types of purchases, such as gas or groceries. So, you can get a cashback debit card and use the rewards to pay off your car loan faster.

The bottom line

Now that you know the ways to pay off your car loan faster, what are you waiting for? Choose the method that best meets your needs and get rid of your outstanding debt as soon as possible. If you are planning to get a cash back debit card, remember that it can help you earn some extra cash to put toward your loan and get rid of debt faster.

RELATED ARTICLES

Neos Networks named supplier on G-Cloud 13 framework

London, UK, 31 January: Neos Networks, one of the UK’s leading fibre connectivity suppliers, has been named as a supplier...

GigaOm Names CloudCasa by Catalogic a Leader and Outperformer in its Radar for Kubernetes Data Protection Report

CloudCasa makes its entry into the leader circle for those buyers seeking a SaaS solution with a “great user experience”Woodcliff...

Freshwave and Midland Metropolitan University Hospital teaming up to build world class mobile network

Freshwave chosen to provide mobile network to new hospital – bringing on board all four operators throughout the new hospital World...

Most Popular

Neos Networks named supplier on G-Cloud 13 framework

London, UK, 31 January: Neos Networks, one of the UK’s leading fibre connectivity suppliers, has been named as a supplier...

GigaOm Names CloudCasa by Catalogic a Leader and Outperformer in its Radar for Kubernetes Data Protection Report

CloudCasa makes its entry into the leader circle for those buyers seeking a SaaS solution with a “great user experience”Woodcliff...

Freshwave and Midland Metropolitan University Hospital teaming up to build world class mobile network

Freshwave chosen to provide mobile network to new hospital – bringing on board all four operators throughout the new hospital World...

Corruption jeopardizes implementation of sustainable policies in OECD and EU countries

Recent findings from the Bertelsmann Stiftung's Sustainable Governance Indicators (SGI) show 14 out of 41 OECD and EU countries faltering...

Recent Comments