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Can you make additional payments on a car loan?
I was fortunate enough to get a promotion at work, and my salary has increased by a substantial amount. Rather than live a more lavish lifestyle, I want to use the additional money to pay off my debts more quickly. My largest debt at the moment is my car loan. Can you make extra payments on a car loan?
Jack Walsh · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Congratulations on the promotion! I’m sure it is well deserved, and using the additional funds to pay off your debts is a great idea!
More often than not, you can make additional payments on a
car loan
, but policies vary, so you should contact your lender to learn more.When speaking with your lender, you should:
- Confirm extra payments are allowed and ask how they’d like to receive payment.
- Confirm it will go towards the principal and not be used to cover interest or be considered an early payment.
Alternatively, if you want to increase your monthly payment amount, you can refinance for a new loan agreement or ask the lender to modify the loan.
If you choose to refinance, you can simplify the process by downloading
Jerry
, a comparison app that instantly connects you with top refinancers that will offer the best rate for your budget. On average, car owners pay $85 less every month by refinancing their auto loan.MORE: Does refinancing a car hurt your credit score?
View full answer
- Gregory R.
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