Tips for Paying Off Your Car Loan Faster!

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Everyone wants to pay off their debts quickly so that their assets can fully become theirs, but how can you pay off your car loan faster?

Paying off a mortgage typically follows a decreasing principal and interest model. The more you pay extra each month, the faster the principal is reduced, leading to less interest paid and a quicker payoff.

However, paying off a car loan is different because it uses a fixed interest rate. The total interest is averaged and included in the monthly installment payments.

If you want to pay off your car loan faster, it's recommended to save up a lump sum and use it to pay off the final installment instead, for example:

If you’re paying 10,000 baht per month for a car loan over 5 years (60 months) and want to pay an additional 5,000 baht per month, set aside the extra 5,000 baht separately. After 2 years (48 months), you'll have saved 120,000 baht, which is enough to cover the remaining 12 installments. You can then pay off the loan in full and might even be able to negotiate with the finance company for a reduction in interest, depending on their terms.

But if you really can't keep up with the payments and want to sell your car now, contact Motorist. You can list any model and year for sale, and it's completely free with no hidden charges!

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