Title: Is Paying Off My Car Loan Early a Good Idea? | MagnifyMoney
Headings: Is Paying Off My Car Loan Early a Good Idea?
Is Paying Off My Car Loan Early a Good Idea?
Advantages of paying off a car loan early
Other benefits
Disadvantages of paying off a car loan early
Other downsides
When paying off a car loan early makes sense
When paying off a car loan early does not make sense
More ways to replace your car loan
FAQs about paying off a car loan early
Should I pay off my car?
What happens when you pay off your car early?
If I pay extra on my car loan, does it go to the principal?

Content: Advantages of paying off a car loan early
Disadvantages of paying off a car loan early
When paying off a car loan early makes sense
When paying off a car loan early does not make sense
More ways to replace your car loan
FAQs about paying off a car loan early
Advantages of paying off a car loan early
The biggest potential benefit is saving money. Here’s an example using one of our auto loan calculators: A $30,000 six-year loan at a 7% APR costs $6,826 in interest. By paying an extra $90 toward the principal each month, you’ll trim a year off your loan and cut interest charges by $1,270. If you have an extra $210 a month, you’ll save $2,366. Notice the key phrase “toward the principal” — you want any extra cash to go toward the amount you borrowed, not interest and fees. You might have to give explicit instructions to your lender when you’re ready to pay off your car loan faster. Other benefits
Simplify bill paying. When paying off a car loan early, you’ll wind up with one less bill to pay. Stress less about negative equity.