Applying for a car loan seems like a ‘cake walk’ with credit unions. In addition to low interest rates and less paperwork, these lending institutions offer various benefits to make the deal more profitable for the clients. However, a loan comes along with a huge responsibility of repaying the borrowed amount with added interest.
If you are looking for efficient ways to save some money on interest and pay your loan before time, you may consider the following points.
Round up your payment – To shorten your loan term and save money on interest, you can round up your payments. For example, if your monthly loan payment is $384, consider paying $400. This may look a small amount in the beginning but it can help to reduce your loan period several months than expected. Apart from this, a round payment is easy to calculate and you do not feel overburdened by paying a little extra from your pocket.
Pay after every 2 weeks- You may strike a deal with your
credit union to allow biweekly payments, instead of paying at the end of every month. This will offer the following benefits:
- Since you will pay more often, less interest will be added on your money
- You will be able to pay extra amount every year
- Tenure of your loan payment will reduce
Pay extra at least once a year - If you cannot afford to pay biweekly payments, you can pay at least one extra payment every year. This can be done by adding a certain additional amount, say for instance $30, which may become equivalent to one month's payment. This will help you to stay ahead in your repayments and shorten the mortgage period.
Avoid skipping a payment- Option of not paying a payment may seem lucrative at first, but it does not provide any long term benefits. It will eventually extend your loan period for months and increase the rate of interest. Therefore, you must not skip a payment until and unless there is an extreme urgency to do so.
Save extra bucks – In order to pay your loan quickly, you can always save some extra money. If you have a part time job or any other source that gives you money, try to put it towards repaying your loan. Even if you collect $100 every month, you’ll be able to save $1200 every year.
Refinance your loan – A credit union may offer extremely low rates on auto loans, which can lower your repayment amount and decrease the loan period to almost half. Eventually decreasing the overall cost of your car loan.
Pay bill online – Credit unions offer discounts on signing up for paperless statements, as it saves the time of the lender as well as the payer.
Some of the advantages offered by paperless billing procedure are–
- There are no checks to write
- No paper statements filling up your mailbox
- You get timely payment reminders
- 24 hours access to your account
- You can pay from anywhere at any time
- Security of your data
- Provision for automatic payments
Paying your auto loan early gives incredible benefits. You can save a lot of money and utilize it to upgrade your home, pay off other debts, save for your retirement etc.
We, at
Greater Central Texas Federal Credit Union, offer affordable
car loans with minimal rate of interests. You can either choose from unsecured or secured car loans. Our staff will assist you with the loan application and all the paperwork involved in the process.
For more details, you can call us at
(254) 690 – 2274 or visit our office at 3305 E. Elms Rd., Killeen, TX 76542.