How do you pay off a car so fast?

[sirkus]

There are people on here who have 2 and 3 year old, 25k cars and have the title in hand. I was wondering how in the hell you could do that so fast? I want to pay off my mazda, but I want to know if there's a trick to it. Such as paying a certain percentage to get it paid off faster. This car was my first new car and I got a 20k loan for 6 years, at a 10.9% interest rate. (Which I've been told wasn't bad considering I had no credit.)

I've had the car for around a year and a half now, and I've gotten the loan down to 18k, but I notice now that I'm getting farther into the loan, the interest is getting lower, and more is coming from the principal. The payments runs me 437/mo and I started paying 100 extra to it, to see if I can get rid of it faster. I just really want to know, is that the way to do it? Or when people pay off cars really fast, do they just throw all of their extra money at the loan?

This has been something that has bugged me for a while.

[stillaneon]

the faster you pay off a loan, the better your credit will be to a certain extent. Dont pay it off in a month, but 6- 18 months will improve your credit tremendously. Any extra money you throw towards the loan every month goes directly towards principle (the actual car) so eventually you lower the payment of the car because the inerest (10.9 in your case) or percentage of the principle is obviously lower. If you were to keep paying 100 dollars extra a month, you would end up paying it approximately 6 months early. Like wise if you were able to pay 800 a month, you would pay it off in about 3 years which is half the term you agrred on and as long as it is simple interest, that would be the ideal way to build your credit. The problem most people run into is they pay the minimum and decide to trade in three years and get stuck with negative equity. Good luck and your on the right path. If you seriously want to pay it off early throw everything towards it....

[keevo54]

Don't eat out as much. Use the extra money you have saved from cooking yourself and you will be able to pay the loan off even faster or get a second job.

[koukis14]

Some people may be able to put down a nice fat down payment or have a nice trade in. Also yeah my buddy is making double payment on his 07 loaded SI. He also makes about 65k a year and lives with his parents.

[Nittanys1]

you can also pay more then your payment per month. that will help out a lot. I did this with my accord. My monthly payments were $115 and I was sending in $200.

[Double_0_Rusty]

its hard being 19 with a 500 dollar truck payment but i send in 530 every month on a 6 year note at 8. something% rate......it sucks, but the ladies love my truck.....

[JayL]

I know a lot of people that get that 2nd job for about a year and all the money they make at this job goes directly on top of the car payment, also they do not do any mods until the car is totally paid off. so.. if you have a 20k loan, and you are able to pay half of that off with normal payments in a year, then you would only have to make 10k through your second job and your car would be paid for.

im not saying that its real life simulation, just trying to show the benefit of having that second job in the place of free time that you normally would be watching tv or drinking beer. oh yeah, and dont buy beer, hypnotize your girlfriend to go buy it for you on her daddy's credit card. lol

i know the idea of having a 2nd job sucks, but when you have something in your posesion that you are working towards owning, you really dont mind having the job.

[sirkus]

I know a lot of people that get that 2nd job for about a year and all the money they make at this job goes directly on top of the car payment, also they do not do any mods until the car is totally paid off. so.. if you have a 20k loan, and you are able to pay half of that off with normal payments in a year, then you would only have to make 10k through your second job and your car would be paid for.

im not saying that its real life simulation, just trying to show the benefit of having that second job in the place of free time that you normally would be watching tv or drinking beer. oh yeah, and dont buy beer, hypnotize your girlfriend to go buy it for you on her daddy's credit card. lol

i know the idea of having a 2nd job sucks, but when you have something in your posesion that you are working towards owning, you really dont mind having the job.

That sounds like a damn good idea.. I just can't go to school, and work at my current job (60+ hrs/week) and another one.. If I wasn't going to school I would definitely try that.
I am just wanting to be able to trade this car for something I want, and not have to wait 6 years for it.

[tony]

I'm sure Jaime will chime in and give good advice but if you have a simple interest loan on your car I believe the interest accrues each day.. so if you make a payment on the first day after your previous payment you will not pay half as much interest if you wait till when it is due. Basically a bigger chunk will go toward the principle and you will pay the loan off a LOT faster.. that is what I do with my credit union and I pay them off within a year. (making additional payments of course)

[splink48]

If it works anything like a home loan, get an amortization chart. That'll tell you how much you're paying monthly to both principle and interest. If your wallet can take it, pay the principle for the next month along with your payment for this month. And also, like with a home loan, make it a seperate check with your account number and "PRINCIPLE" written in the comment line. That pretty much eliminates that payment. 6 years turns into 3, kinda like 30 years turns into 15. The only drawback is that although this isn't so difficult in the beginning, it gets pretty damn tough towards the end of the loan when the majority of your payment is actually going towards principle and you decide to pay your 500 plus the additional 450 for the next month. It should be pretty easy if you stick to it though.

[2.0civic]

pay your payments weekly instead of monthly...with the way the interest compunds, you save a shitload.

example: instead of $400 one time a month, do $100 4 times...It helps ALOT doing that. Last time i figured it out on a house just goofing around, it saved almost 100k but then again thats over 30 years doing it like that with a little extra on the payments

[JennB]

BTW... it's "principal"

I would say more but it's time for me to go home. Pay extra and pay often, it will work.

[noodle]

Before you start paying off your loan you need to check your loan papers. Some loans will penalize you and charge you extra for paying off early. Read the fine print.

[DarkPrince10]

pay your payments weekly instead of monthly...with the way the interest compunds, you save a shitload.

example: instead of $400 one time a month, do $100 4 times...It helps ALOT doing that. Last time i figured it out on a house just goofing around, it saved almost 100k but then again thats over 30 years doing it like that with a little extra on the payments

I think this was on clark howard wsnt it?
but I guess his method was every 2 weeks since by the end of th eyear you end up getting in a couple of extra payments in.

(I presonaly dont like getting and/or being in debt to anyone)
only reason I would ever take out a loan is to pay it off the following month just to up my credit(I dunno if that would help it at all or not..)

good job on bringing it up stevo

[2.0civic]

I think this was on clark howard wsnt it?
but I guess his method was every 2 weeks since by the end of th eyear you end up getting in a couple of extra payments in.

(I presonaly dont like getting and/or being in debt to anyone)
only reason I would ever take out a loan is to pay it off the following month just to up my credit(I dunno if that would help it at all or not..)

good job on bringing it up stevo

I dont listen to clark howard but thats what my sister did and turned a 6 year loan into a 2.5 year loan and in reality didnt pay much more than her normal payment

[CMO]

Just keep adding extra money to your payments. I did that with my 01 Civic and I almost had it down to $5000 in 2 1/2 yrs. When I sold the car I kept around $7000.

[PRiMAdonna]

big down payment & big monthly payments will do it.

[pimpstaman90]

Some people may be able to put down a nice fat down payment or have a nice trade in. Also yeah my buddy is making double payment on his 07 loaded SI. He also makes about 65k a year and lives with his parents.

makes that much and still lives with his familys? makes me think twice when i see people with nice ass cars...

[sullen]

whore yourself out to make some extra money and throw it at the loan instead of buying the condoms.

[hydroshutter]

Live within(mostly under) your means and pay more than your monthly payment...Maybe pay a quarter of a payment, because every 4 months= 1 extra payment..

Something like that.

[ep9716]

Dont Buy A Car You Cant Afford..................................

[ironchef]

makes that much and still lives with his familys? makes me think twice when i see people with nice ass cars...

Or he could continue living with his parents, finish paying off the car, save up money. And then buy a house or something, because he'd had a good down payment saved up.

[BaHumBugg]

bring lunch to work

[Halfwit]

i jsut bought a car. i put down half of it. loan for rest. i will have it paid off in no more than 5 months. im 19.

i jsut waited til i had a fat down payment. i reasoned with myself and concluded that having 1/2 of the price was good enough.lol

[Vuongy_Dong]

my 2008 Nissan Titan monthly payment is $626. Im sending in $900 a month. hopefully I'll pay it off in 3 years or so.

[Greddypacked]

Trade in the car for a nice used car w/ around 80K miles on it. You can get some bad ass GS-t's, GSX or cars for 8 grand and they have loads of mods already put on it. I bought a 27K brand new Eclipse GT paid like 17 grand on it then got rid of it. I would have love to use that 17grand on buying a car flat out and having no payments on it lol. Buying a brand new car is for people that make some good money unless you want a nice big hole in your pocket.

[Jkuao]

Trade in the car for a nice used car w/ around 80K miles on it. You can get some bad ass GS-t's, GSX or cars for 8 grand and they have loads of mods already put on it. I bought a 27K brand new Eclipse GT paid like 17 grand on it then got rid of it. I would have love to use that 17grand on buying a car flat out and having no payments on it lol. Buying a brand new car is for people that make some good money unless you want a nice big hole in your pocket.

Newest turbo Eclipses are 8 years old and most are much older. 8k is the starting price...best to have thousands more for wear items (brakes, tires, suspension, etc). No different than having a payment on a car but you're a bit more likely to be stranded on the side of the road.