Keeping Your Car In Shape
4 Simple Tips to get your auto loan balance down faster without spending more money!
Negative equity....Upside down....What ever you call it, about half of my online guests owe more to the lender than the market value. If you find yourself in this position, here are 4 quick, simple steps you can take to get you closer to that wonderful place called....Equity!
1. Consider canceling any pre-paid warranty/maintenance programs you may have.
Be sure you think about the big picture...If you really think you'll be keeping the vehicle for the next 6-12 months and you have a higher mileage vehicle...this might not be the best choice for you. However, if you have less than 30-50k miles and don't foresee immediate mechanical problems, this is a simple way to lower your principle balance on the loan. To cancel these programs you will need to contact the dealer where you purchased the vehicle. They usually have a cancellation request and mileage statement. The pro-rated difference on the warranty will then be sent to your lender! Within about 4-6 weeks your balance will be lowered and you'll be closer to an equity position!
2. Make your payments a few days early!
Sometimes people think they have to pay MORE on the monthly payment to reduce the principle faster...but there is an easier way. It won't take more money out of the monthly budget! Just by making your payment 7-10 days sooner will reduce the amount of interest you pay each month (sometimes by a LOT) This one simple change will get you to your goal faster!
3. If your budget allows, add a few extra dollars to your payment each month.
If you combine this technique with #2 you'll make even more progress!
4. If your interest rate is high (over 7%) talk to your bank or credit union about refinancing the loan.
If your vehicle qualifies and your credit rating is good, you should be able to refinance and each payment you make at the lower interest rate gets you to your goal MUCH faster!
With a little effort and planning, you'll be so much closer to reaching your goal and being able to trade your vehicle in on another that better suits your needs!
Even though I may not be able to help you with an automotive purchase now, I care about your progress. If you have questions, just call me! I've seen a lot of different situations and I can give you input that may help!