How I Paid Off My Car Loan In Under 6 Months
I paid off my car loan in under 6 months! Yes, you read that right. I’ll show you exactly how I did it, and how you can do it too! Keep reading.
Getting a Car Loan
It was time to get a car loan. There’s a lot that goes into making this decision: paying cash vs. getting a loan. A lot of folks opt for a loan because, well, let’s face it, not many can afford to buy a car cash. I mean, it’s a car! A huge investment. So, like many, I opted for a loan.
Here’s what I was looking for:
- Flexible payment term
- Low APR
- No early payment penalties
- Online payments
Flexible Payment Term and Low APR
Your annual percentage rate (APR) is your interest rate over the year. It’s the difference between a $200 monthly payment and a $300 monthly payment. Generally, lower rates go to those with excellent credit and stable employment/income history.
Your payment term is the length of time you’ll be paying your loan, like 4 years or 6 years. A shorter term means higher payments but paying less interest over all. A longer term means lower monthly payments but paying more interest. You’ll wanna look at the two options to see which one is the better fit for you.
No Early Payment Penalties
Yes, prepayment penalties do exist with some banks. This means, if I take out a 4 year car loan and can pay it off in 2 years, with no early payment penalty, I can do so without added fees. Makes sense?
This is super important because in my scenario, I paid off my loan in under 6 months, with no added fees!!!!
It all boils down to convenience. Do you want to drive to the bank every month to make your payment or log into your computer to make a payment? I have a busy life, so online banking is important.
So this is how I made my decision. I looked at all this criteria and made the choice on a specific loan company.
How I Paid It Off Early
You can pay it off early two ways: small extra payments over time or a large bulk payment. I did option 2.
Now, small extra payments over time is great. You get a work bonus or hit it big at a casino and you throw some extra cash toward your loan. Great!
I opted for the large bulk payment because I sold part of my business and got a sum of cash that allowed me to do an early payoff. I didn’t have many high APR debts at that time. The car loan was actually the highest and the highest payment so it was a no-brainer to pay it off.
What part of my business I sold?
This was actually my first venture into website flipping. I’ll talk more about flipping in the blog, but in a nutshell, like house flipping, where you buy a house at a deal, fix it up, make improvements, and flip it for a profit, website flipping operates the same way.
You buy a site low or build a site. Then, fix it up, grow it, monetize it, and flip it for a profit. You can make $100 or $100,000 doing this, and every amount in between, below, and above this range.
It’s a great side hustle and an opportunity to really control your income, even making it a full time job prospect (yes, you can do website flipping full time).
If you’re interested in learning more about it, check out this article I wrote about it which shares a bit more. I also teach students in my course, Website Flippers University. It’s a monthly ongoing mentorship course with weekly lessons. Really cool stuff. Join us if you’re looking for an extra income opportunity.
Paying off big debt is within reach! Not everyone sells off part of their business or gets a lump sum payment but you can pay off debt early with extra micropayments to chunk away at that loan little by little. Anybody can do it and it’s such a freeing experience when it finally happens.
Do you have a debt payoff story to share?
Comment below so we can hear from you!