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Can you pay down the principal on your car loan?
I’ve had the same car loan for a couple of years. I’m much more financially secure now than I was when I got the loan. I really want to pay it off as quickly as I can. How do you pay down the principal on a loan?
Chloe Jenkins · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Yes, you can usually pay down the principal on your
car loan
. But before you do, check the terms of your loan to make sure that you won’t be incurring any prepayment penalties
if you do.If you won’t incur any fees or the fees are so negligible it still makes sense to pay your loan off faster, you’re free to start tackling the principal. Be sure to discuss with your lender that you want to specifically apply the extra payments to your principal balance, or they will be more likely to credit your next month’s bill instead.
Note that paying more on your principal won’t decrease your monthly payments. If that’s your goal, you’re much better off refinancing your loan with the
Jerry
app.Jerry is a great resource for comparing loan options from multiple lenders. Use our refinance calculator and avoid the hassle of searching for lenders yourself. Jerry makes it easy by finding the best lenders with the best rates.
MORE: Does refinancing a car hurt your credit score?
View full answer
- Gregory R.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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