Steps to Paying Off a Car Loan Early
For many borrowers, paying loans is something that becomes routine and is done without much thinking. However, after a few years, many seek relief from the monthly payments. Whether you’ve found yourself with a recent bonus check, new job, or any other major change to your financial status, you may be considering cashing in that check and paying off your Kia Sportage car loan early.
Whatever the reason may be, many borrowers are curious about how they can pay off their loan early, if they’re allowed to pay it early, and what happens after they do. The team at Friendly Kia has put together this guide to the steps you can take to get your car loan paid off early.
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Are There Negatives to Paying Off an Auto Loan Early?
Aside from a potential dip in credit score, there aren’t many negatives when it comes to paying off an auto loan early. Paying your loan off early eases the stress of monthly payments and it’s one less thing you have to worry about taking care of.
Closing loans can temporarily drop a borrower’s credit score, though, so if you are looking to keep your credit on the escalator up, then it would be in your best interest to keep the loan open. Additionally, some lenders don’t make it easy for borrowers to pay their loans off early depending on the terms and agreements set at the time of approval. Always be sure to check that your lender does not have any prepayment penalties in place that could land you with a fee should you try to pay off the entire loan ahead of schedule.
Take These Steps to Pay Off a Car Loan Early
Looking past any potential negatives, paying off a car loan early can be freeing and can help you take major steps forward financially. Whether you are looking to make a future purchase, are trying to build your savings, or are simply trying to rid yourself of too many monthly payments, getting your car loan out of the way is a great start. Here are a few easy steps you can take to get ahead of your payment schedule and pay your loan off early:
- Split your monthly payments in two, paying half of your set payment every two weeks.
- Round your monthly payments up to the nearest $20, $50, or $100.
- Make one large additional payment every six months or once a year.
- Never skip a monthly payment.
- Refinance the loan for a better interest rate.
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At Friendly Kia, we work to make sure every new Kia customer’s loan sets them up for success. Contact a member of our finance team to see how we ensure every customer receives the financial assistance they need and the assistance that fits their budget and lifestyle. If you are looking for help paying off a car loan early and are in need of advice, don’t hesitate to contact our team.