How to Pay Off Your Car Faster – 3 Smart Hacks

Budgeting, Get Out of Debt

Learn how to pay off your car faster and save some major dough! With these three hacks and bonus tips, you'll be rollin' down that savings track in no time at all. Choo Choo!

Couple smiling while paying bills from Fun Cheap or Free.

Dreaming of paying off your car early but not sure how to begin? We've got you, friend. Paying off your car loan early does NOT have to be a pipe dream… It's totally possible and, dare we say it, easy!

We're going to show you all the ins and outs of paying off your car early, from how it affects your credit, to our three best hacks to get it done. By the time you're done here, you'll be an expert! Shall we begin?


Whether you're trying to go totally debt-free or you just want to save money on a high-interest loan, learning how to pay off your car faster can benefit you and your wallet in a big way. Here are some of our favorite reasons why we totally vote for an early payoff!

  • Save Money on Interest – In most cases, the quicker you pay off a high-interest loan like a car, the more money you save in interest. That's plenty of reason for us!
  • Free Up Money – Once your car is paid off, you now have that money freed up in your monthly budget. Helloooo savings account!
  • Boost Your Credit Score – Depending on your situation (more on that later in the post!), paying off your car early may give you a nice little credit score boost!

Pretty exciting, right?! However, there are some things you need to check on before you start making those budget changes. Keep on reading to get all the deets!


Before you make extra payments on your car, be sure you check with your lender to get all the details of your loan and how it all works. Though it's not super common, some lenders do impose a penalty for paying your vehicle off early. In some cases, this could even negate the interest savings!

Another factor to check before making extra car payments is where the extra payment is applied. Lenders may actually put extra payments toward the interest of the loan and not toward the principal. Check with your lender to see how you can put those payments directly toward the principal instead!


It's important to know the answer to this question before paying off your car loan early. As a general rule, if you have other debt (such as a mortgage, student loans, or another car loan), paying a high-interest loan off early can help lower your debt-to-income ratio (DTI). This can boost your credit score and make you more desirable if you're trying to acquire another loan.

However, if you don't have another loan, paying off your car loan can actually hurt your credit! Not having any loans limits your credit diversification. We agree… It seems silly! Unfortunately, lenders want to see that you are paying on a loan before they give you another.

Okay, now it's time to go over some practical ways to pay your car off early. You've got this!


Couple laughing while paying bills from Fun Cheap or Free.

While it would be fantastic to take a huge chunk of money and pay down that car today, that simply isn't a reality for most people. No worries! We've got three clever ways you can get that car paid off early without feeling the pain in your wallet. Are you ready? Let's get to it!

  • Biweekly Payments Instead of making your car payment once a month, split your monthly amount in half and pay that amount every two weeks. Since some months have five weeks, the total comes out to thirteen car payments by the end of the year! You'll end up paying a little bit more over the course of the month, but you won't even notice it.
  • Round It Up – Another easy and painless way to pay off your car early is to round your payments up. If your car payment is $309, round that up to $350 and pay that amount monthly instead. It may not seem like much now, but it will save you money on interest in the long run!
  • Make an Extra Payment – If paying off your car is the top priority, then try to make at least one extra payment a year. Do that on top of rounding up and paying biweekly and you are going to make some serious headway on paying that car off early!

Not sure where the extra money is going to come from? Keep reading for some easy and creative ways to make or save some cash!


Jar of rolled up money from Fun Cheap or Free.

The first step to finding extra money is to make sure your finances are in order. Check out our popular post on the 70% rule and get the basics you need today. Once you've done that, you'll know exactly what you need to do and how much money you need to make to hit those payoff goals!

Here are some of our best tips for making or saving some extra dough you can put right toward that loan!

  • Spending Freeze – A spending freeze is a great way to save some cash quickly! With a simple seven days of no spending, you'll be shocked how much moolah you'll have available to put towards paying your car off faster. Do a few spending freezes a year and really get the early payoff rolling!
  • Grab a Side Gig – There are so many ways to earn extra money with a side gig. Some of them are even done without leaving your home! We have multiple posts with side hustle ideas, how to make money from home, how to make extra money, and apps you can use to earn extra money, so be sure to check those out!
  • Tax Refunds or Bonuses – Forget splurging this year, spend that tax refund on paying off your car loan early. We know it isn't fun, but it's so worth it! The same thing goes for company bonuses and any other money that falls into your lap.
  • Pay Raise – Did your family benefit from a pay raise recently? Booya! Instead of raising your expenses like so many do, use that extra income directly toward your car loan until it's paid off.
  • Apply the 3-Month Rule – Applying this financial principle is one of the best things you can do for yourself and your family. Find out what it is and how to implement the 3-month rule in this post and use all that extra money you saved to pay down that car loan, baby!
  • Yard Sale – Have a bunch of stuff lying around that you never use? Host a yard sale and put all the profits toward your car loan!

Okay, now that you know how to pay off your car faster, it's time to get to work! With these helpful tips and tricks, you'll be making that final payment and kissing your car loan goodbye before you know it.

Have you successfully paid off your car loan early? How'd you do it!? Share your own tips with us in the comments below!

image with text that read "how to easily pay off your car loan", from Fun Cheap or Free

If you need even more help with your budget, then be sure to check out Budget Boot Camp! It's an amazing online video program that walks you through everything you need to get your budget in order, get out of debt, and whip your wallet into shape.

Sounds pretty amazing, right?! We know you'll love it so much, we even offer a 100% money-back guarantee if you don't save at least as much as you paid. Plus, use the code FCFBLOG for 10% at checkout!

Want more great budgeting tips and ideas? Check out these posts, too!

Ready… Set… Save!


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