Six ways you can pay your short term loan on a car early

For many of us buying a new car is a necessity, something we need to get to and from work or to run our busy day-to-day lives. But a lot of us don’t have a few thousand pounds lying around to make buying one a simple affordable task. Short term loans are there to help you secure that new car and can be paid off flexibly to meet your needs.

Sell your old car
The first way of paying of your short term loan quickly is to sell your old car. You might not be able to sell your old car before you’ve bought a new one because you simply can’t be without a car for a week, or even a few days. Once you secure a new car you can sell your old one and use the pay-out you get to pay off some of your loan. The feeling of seeing part of your loan wiped off so quickly will be such a relief.

Pay money off every two weeks
Instead of paying money once a month see if you can pay half the monthly payment every two weeks. You might think this seems silly but if you do this you’ll make 26 half monthly payments over a year which actually equals 13 full payments rather than 12. By doing this you can pay off a little bit extra over the year and maybe even clear off your short term loan early.
Round up what you pay each month

If the monthly payment is set to be £182.79 a month for your short term loan round up what you pay to an even number, for example £200 in this case. You probably won’t miss the extra £18 but over the time of your loan this will mean paying it off that little bit early, this can also prevent you from paying quite as much interest as you were originally expecting to.

Never skip payments
Buying a new car is an expensive process but do not be tempted to a skip a payment, even if your lender allows you to as this will only add on time to your repayment process and increase the amount of interest you will pay. If you really can’t afford the full amount one month it is better to pay what you can than nothing at all, but always try to catch up with what you have missed where possible.

See about transferring the balance
A lot of credit cards will offer you a period of say a year interest free if you transfer a balance. Once you get to a lower manageable amount left on your short term loan it might be worth seeing if you can transfer it. You may have to pay a one off fee for doing this but each month you won’t have interest added on like you might in other situations.
Beware of early repayment charges

Some short term loans will actually charge you to pay off your loan early, if this is the case keep aside the money you would pay off the loan and only pay it at the end of the loan period, or when the charges won’t kick in. If you worry that you might spend it then call your loan providers and see if you can reduce the early repayment charges, you won’t get if you don’t ask.

Our short-term loan options are at the Lowest rates in the subsector and offer easy and fair repayment terms. Why not get in touch with us to see how we can help? Simply fill in our online form or give us a call for a no-obligation chat.

Further reading: MoneyAdviceService.org