5 Ways to Reduce Charges on Your Auto Loan

• Posted on Autos.com Editor
• in Auto Loans
• on October 7, 2013

Today many consumers are looking for ways to reduce charges on auto loans. The good news is that it can be accomplished. Here are five methods to reduce auto finance charges:

Method #1: Refinance

Many people don’t realize that auto loans, like mortgages, can be refinanced. If you’re paying too high an interest rate, take the time to find another lender.

Method #2: Know Your Credit Score

If you want to reduce your car loan payments, examine your credit score. If it’s low, immediately find ways to fix it. Fix mistakes on your reports, and find ways to gradually rectify past transgressions.
Method #3: Make Payments Early

Making your car loan payments early will help. Since interest rates are compounded daily, even if you pay only one week early, you save. Begin by carefully planning due dates and cash flow.

Method #4: Make Payments on Time

If you can’t make payments early, then at least make them on time. Late charges apply if you’re even a day late. Additionally, late payments lower your credit score.

Method #5: Make Extra Payments

Determine which months your cash flow is better than average. During these times, make an extra payment on your auto loan. These payments will reduce the length of the loan and save you money.

During a time when most of us are looking for ways to reduce expenses, becoming proactive can go a long way to saving money.