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How can I avoid finance charges on my car loan?

I'm tight with money, and I don't want to pay more than I have to. Is there a way to avoid finance charges on my car loan?

avatar
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
We totally understand that you’re looking to save money, but let’s clear up what finance charges refer to.
Finance charges on a
car loan
 refer to any cost from borrowing money. Finance charges can include:
  • Interest rates
  • Origination fees
  • Administrative and clerical fees
  • Prepayment penalties
  • Late fees
While some of these are unavoidable, such as an interest rate or administrative fees, you can bypass others by simply making your payments on time. If you want to save even more money, you should offer to pay the origination fees and clerical fees upfront. By paying these fees upfront, you eliminate interest payments on them.
You can also lessen the impact of interest by paying your loan off early. As long as your lender doesn’t have any
prepayment penalties
, you can put more money toward the car each month until you pay it off.
Since you’re looking to save money, you should consider shopping around for car insurance. Sign up with
Jerry
 to compare quotes from up to 50 different insurers in just minutes. The average Jerry user saves $879 per month!
More: What is APR and how is it calculated?
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