How to Repay the Car Finance Early Without Extreme Measures

How to Repay the Car Finance Early Without Extreme Measures

Your aggressive approach towards loan repayment can help save serious money. The lender will charge interest for the loan duration for the car finance that can last up to 5 to 7 years. Repaying the loans early means you don’t have to pay interest for the remaining months.

It means you will save money on the interest to reduce the overall cost of the car. However, it seems a good idea, but the implementation is never easy because of the limited income and tight budget. But the struggle is worth the trouble because you will enjoy a debt-free life early to focus on the more important financial goals.

How to Take Car Finance That Suits Your budget

There are multiple ways to make car finance sweeter with lower interest rates and other benefits. You should start with gathering the documents to make the process easier for the representative. Make sure your profile mee the eligibility of their car finance.

The increase in down payment can also help to make the finance provider offer a better deal. You can repay a few debts early to reduce the income to debt ratio and the risk associated with your profile. However, it is easier to get car loans in Ireland with favourable terms if you’re dealing with direct lenders instead of dealerships and established banks.

The internet is full of ideas to save money on the overall cost of the car. It is the first step to make the instalments manageable and early repayment a possibility. Also, make sure the lender doesn’t charge unnecessarily for the early repayment to cover their losses.

Tips to Pay the Car Loan Early

Early repayment of the car loan will require

  • Find the Exact Amount to Repay

You should start with coming up with the exact amount to pay the finance provider. It will help create an effective plan for the early repayment, keeping in mind the additional costs. Therefore, ask the lenders about the overall cost of the loan and any early repayment charges associated with it.

Now, add the other expenses to the overall cost of the car, such as insurance and maintenance. You should never ignore these expenses as they may create overwhelming stress on your budget. Once the final amount is clear, you can come up with the exact money to save each month for the early repayment of your car finance.

  • Round off the Instalments

You don’t have to make a significant contribution each month to repay the existing loans early. Even a few pounds to round off the minimum payment can help save money on the overall cost. Debts such as car finance are long-term liability, and small contributions can significantly impact the long run.

Round off the Instalments

Therefore, you should keep your aggressive approach during the financially challenging months to repay the debt early. Add a few pounds to the repayment if a considerable contribution is not possible. The approach of paying more than required should remain consistent throughout the repayment period.

  • Downgrade Vehicle

Another method to repay the loan early is to reduce the loan amount to buy a car. You can either increase the down payment or select a lower model to make the installments easy. After all, the base models come with the essential features, not the unnecessary luxuries.

Even the dealership will try to sell the upper variant of the car with their sales strategy. You must stick with the requirement to find the vehicle in your budget. Remember, you can use the aftermarket for addons in the future when you can afford those extra features.

  • Budget 

Your spending habits will have a huge impact on loan repayment. A budget will help save a certain amount each month to speed up the loan repayment. Thus, spend a few hours to budget for the essential expenses such as early repayment of the loan.

You should automate the payments to avoid spending the money on less important expenses. Moreover, come up with creative ways to save on essential costs such as grocery, food, travel, and utility bills. One such method includes carpooling to the office to share the fuel expenses with other people.

  • Avoid Needless Expenses

Limiting the money to spend on unnecessary expenses is an essential aspect of financial goals. You will not make progress until you have complete control over the spending habit. Therefore, identify the sources of unnecessary spending to optimise your budget and increase the instalments for early repayment.

Start with creating a list of unnecessary expenses and their source to find the cause of your budget problems. You can use the account statement of the past few months to find the required transactions. The task will become easier if you cut the trigger points such as the shopping apps or discounts in the local markets.

  • Refinance

You can contact another lender to refinance your car loan to get better interest rates. In most cases, it will require timely payments of the instalments to get approval. You can negotiate with the new lenders to avail of other benefits such as repayment holidays and flexible schedules.

The chances to get a better offer is great if your profile has improved over time. You can apply at multiple direct lenders to get car finance for bad credit at affordable interest rates. Use the offer to negotiate with the existing finance provider to lower the interest without going through the refinancing process.

  • Increase Your Income

A simple solution to increase the instalments is to work on your income. It may sound outrageous to call it a simple solution but access to additional income has never been easier. You can use the online platform to sell some products or declutter your house.

Another way to increase the income is a freelancing job outside your daily working hours. Businesses are trusting freelancers for their requirements instead of spending money on the hiring process and infrastructure. Thus, you get to use your professional skill set to make extra money after your primary job.

  • Use the Extra Money

You can also use the extra money to pay the finance provider instead of using it for personal expenses. The sources of this extra money include tax refunds, pay raises, and bonuses. However, most people use it for unnecessary expenses such as buying the latest gadgets or a vacation.

While the tax refunds are outside your control, you can certainly get a raise in your income with your efforts. Add new skills to your profile to convince the existing employer for a raise. Opportunities outside your existing organisation are available with better pay if you have the right skills for the job.

  • Use Snowball Repayment Method

You can use the snowball method to save money on the repayment if you have multiple debts along with car finance. It requires people to focus on the loans with a smaller amount to repay. Thus, saving money with early repayment while clearing the debts one after another.

The snowball method is effective because it gives a sense of achievement with the early repayment of the smaller debts. Thus, you are more motivated to clear the more significant debts with the existing strategy. However, it is not the most efficient method if the high-interest debts have a larger amount to repay.


To sum up, early repayment of car finance is easier if you spend time on the planning phase. It will require consistent efforts to save enough money to pay an amount more than the required instalments. Also, you must check with your finance provider the prepayment charges to find whether the process is worth the trouble.


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