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Can you prepay a car loan?
I’m really sick of paying this car loan I’ve had for the last five years. I have a decent amount of money in my savings account right now. Is it okay to pay off a loan early?
Chloe Jenkins · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
In some cases, yes, you can prepay your
car loan
. But you should be careful in doing so—you don’t want to get stuck with an unexpected prepayment penalty
for paying the loan off early.To find out if your loan has any prepayment penalties, start by reading through your loan agreement. If you can’t find any information there, give your lender a call and ask.
If you won’t incur any penalties, make sure that you let your lender know that your extra payments are meant to go toward your principal. Ask if they have a preferred method for you to make these types of payments.
If you’d rather save on monthly loan payments and avoid incurring fees, consider
refinancing
with the Jerry
app.Refinancing your auto loan is a great way to lower your car payments, but finding the right lender can be stressful and time-consuming. Jerry makes it simple—just download the app to compare top lenders. On average, car owners pay $85 less every month by refinancing.
View full answer
- Gregory R.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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