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Is it possible to make principal-only payments on a car loan?
I want to lower my principal to shorten the length of my loan. Is it possible to make principal-only payments on a car loan?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Yes, you can make principal-only payments on your
car loan
in most cases. Talk to your lender about the best way to make principal payments on your loan.A principal-only payment not only shortens the length of the loan, but it can also cut the amount you pay in interest over the life of the loan. However, you should make sure that you don’t have any
prepayment penalties
on your car loan. These penalties can often add up over time, so if you’re not careful, you can offset the savings of paying down your principal by paying too many fees. Always ask your lender about this before you decide to blindly throw money at the principal.
If you want to free up some cash to throw toward the car loan principal, give the
Jerry
app a try. Jerry compares personalized rates from more than 50 top providers, including Nationwide, Allstate, and Travelers, and delivers the best deals to your phone in minutes for free. The average Jerry driver saves $879 a year on car insurance!View full answer
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