Home Auto Financing How to Get Rid of Your Car Loan

How to Get Rid of Your Car Loan

When buying a car/vehicle most people can’t afford to make the entire payment at once, often opting for loans through a bank or lender. Payments are made according to the terms decided between the owners and the dealer.

There are various terms and conditions for the sale including:

  1. The duration of the loan term
  2. The amount to pay
  3. The schedule of payments (Monthly, Weekly, Fortnightly)

Whatever your reason is for wanting to get rid of your car loan payment, there are several ways you can approach the situation.

Make the Loan Payment

This may sound very easy, although many of us with loans are quite unaware of so many details. Buying a car is exciting but it is possible to leave out or forget about important details, in the process. When you have the money ready, it is better to clear off dues as soon as possible.

Most loans that are due can be cleared off at any time. You can contact your lender or bank and arrange to make the remaining and final payment. It also saves you interest on the loan amount and helps you maintain a good credit score. A decent credit score can help you in the future when you may opt again to go for a loan.

Refinance Your Car Loan

Refinancing allows you to get a new loan to pay off the old one. Refinancing loans change the terms on your current loan. Depending on your needs you can ask for a loan with lower payments, lump-sum payouts or lower interest rates.

If you’re struggling to make your monthly payments, you can talk to your lender about an option to refinance or renegotiate your loan. This can turn out to be the easiest solution for both the lender and the borrower. Because, the lender will be able to avoid charges to repossess your car in case of a default, and you’ll be able to get a better rate on your loan without ruining your credit score.

Other Ways to Get Rid Off the Loan:

  1. Check the balance loan amount on your car: Call up your lender and ask for the current loan payback amount. This figure is basically the remaining amount that needs to be paid.
  2. Car sale advertisement: one can advertise their car by putting out advertisements to attract potential buyers.
  3. Bargain the price with the potential buyer: always remember you need to have only some amount to pay off your loan.

Trade Your Car

  1. If you have enough equity in your car, you can trade your car or vehicle for a lesser amount and walk away without paying a single penny. To make this happen:
  2. Check your car’s buyout amount: Ask your lender for the total buyout amount along with disbursement fees.
  3. Check your car’s exchange value: It is better to be aware of your car’s approximate exchange value.