Around 19% of Australians take out a car loan to purchase a vehicle. Along with a home loan, a car loan is often one of the most significant financial obligations you’re likely to have during your life.
Unlike a home loan, where you have up to 30 years to pay off your debt, most car loans have a maximum loan term of nine years. So how can you pay off your car finance early and avoid paying extra interest?
Yes Loans’ top tips for paying off your Perth car loan early.
Make Weekly Payments
If your lender allows it, weekly payments can save you a considerable amount of interest. Even making fortnightly payments can save you lots of time and money. You make 26 payments per year with fortnightly payments, rather than only 12 if you pay monthly.
Round up your payments
If you round your payments up to the nearest $50, you’ll repay your car loan more quickly. Any extra repayment you can afford will help bring down the capital faster – saving you interest over the loan term.
Try to make one big extra repayment a year
It can be tempting to splurge when tax time rolls around, but the sensible option is to make an extra repayment on your small car loan and help get it paid off quicker. You’ll save even more in interest by making at least one larger additional payment a year. Keep in mind, the earlier you make an extra repayment, the more money you’ll save over the loan term.
Never miss a payment
Sometimes life throws lemons at you, and things get tough, but it’s important to never skip a payment on your Perth car loan. Missing a payment will lengthen the term of your loan and cost you more in interest.
Are you thinking about applying for car finance?
Use our handy car loan calculator to see how much money you can afford to borrow, and use our Car Buyer Guide to help find the right car for you. Once you’ve had a look, give us a call, and let’s talk about how we can help you get the vehicle of your dreams. Our car loan specialists will guide you through the loan process.
Choose Yes Loans for your car finance in Perth
Talk to Yes Loans to find more about our fast, efficient car loan options. We know that cars on the market – especially good value ones – don’t stay advertised long. The sooner you have the money, the sooner you can buy that dream car.