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How can I pay off a high-interest car loan faster?
I have a car loan with an interest rate of 21.9%. How can I pay my car loan off faster with such a high interest rate? I don't have the cash to pay it off completely.
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Sorry to hear about that whopping interest rate, but I’m happy to say that you have several options to pay down your high interest
car loan
, so don’t stress too much.Since you don’t have the cash to pay off the car loan, which is relatively common, you can still pay down the principal as much as possible. You can do this by doubling up on payments, making a lump sum payment, or just rounding your loan up from, say, $330 to $350 or $400.
Since you’re likely upside down on the car loan, or owe more than its worth, due to your interest rate, refinancing probably isn’t an option. Therefore, the key to paying off a car loan faster lies in where you source the money from. Here are a few ways to save:
- Moonlighting or side hustling
- Putting your bonus or tax refund toward the car loan
- Pay your highest interest debt first before you pay others, in this case, it’s simple to assume your car loan debt has the highest interest rate.
Another great way to save is to go over your car insurance policy and compare rates. To do this easily, check out the
Jerry
app—we’ll get you customized quotes from top insurers in seconds, so that all you need to do is pick the plan that works best for you. And once you pick, we’ll even help you switch!Best of luck with the loan!
View full answer
- Gregory R.
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