When you are close to paying off your car loan, you can push yourself to pay it off early. It’s a good feeling when you are able to get one debt off your back. It gives you peace of mind and you can turn your focus to those other debts.

Compared to home loan, a car loan is manageable. The amount is not immense and it is possible to pay it off early. Additionally, it will have a positive effect on your credit score. So how do you get free from the car debt early?

Never Skip a Payment

Every month, you are required to make a payment – never skip it. Before you can even start thinking of paying the debt off early, you have to stay on track. Paying it every month is an easy way to stay on track.

Also, avoid making late payments. Late payments have a negative effect your credit score and that can’t be good if you’re hoping to rebuild your credit.

Go Bi-weekly

Monthly payments are convenient, but if you want to quickly pay off the debt, switch to bi-weekly payments. You put in money more frequently and rein in the debt. Since you are paying twice a week, you are also paying less interest. Bi-weekly is a really good idea if you are prone to making late payments.

Use your Bonus

Every year make one extra payment for your auto debt. Rather than blowing away your bonus, you can utilize it for your car loan. Under the usual circumstances, you may not be able to gather excess money to make that extra payment. However, when you get a bonus, be it in the form of a salary bonus or a tax refund, you can utilize this extra cash for the debt.

Pay more than the Minimum Payment

You do not have to stick to the minimum payment. It is just a figure that you have to keep to if you hope to finish paying off your debt within the time period. If you are finding it tough to gather the money to even pay more than the minimum payment, aim to at least round off the minimum payment. For example, if the minimum payment is $385, you can pay $400. In the bigger scheme of things, this small increase in payment will help you pay it off early.

Start a Budget

The ability to never miss a payment, keep paying it bi-weekly and paying more than the minimum payment is a challenge. You need to start budgeting. This is the best way to manage your limited income and make an efficient use of it.

You control your spending, save more and contribute additional income into your debt payments. Furthermore, budgeting allows you to allocate a certain amount of your income to you debt payment. This way, even at the end of month, you have money to pay for it.

True, it can be difficult to pay off your car loan early. But, the advantages are that you are charged less interest rate, your credit score improves and you can focus on other debts.