How to Pay Off Your Car Loan Faster

How to Pay Off Your Car Loan Faster


Even for the most financially-minded among us, it can be a struggle to pay off the car loan we’ve taken out in order to secure the vehicle in the first place. No matter how much you adore driving your flash new car, after a while, it starts to wear thin, doesn’t it? For most families, it can often be the most significant expense after their mortgage. Additionally, the penalties for non-payment can be harsh, varying from fines and raps on the knuckles all the way up to repossession of the vehicle itself. While that latter instance is clearly the worst-case scenario, it is, unfortunately, something that can happen; and the mere existence of that possibility can be enough to drive some people around the bend. 


In Toronto, many loans take between 48 and 96 weeks to repay, so you had better get used to making that payment now and far into the future. Depending on the state of your credit when you acquired the loan in the first place and how much of a downpayment you decided to include in the deal, you’ll most likely fall closer to one of those extremes or the other. But in truth, there’s not a whole lot of practical difference between 48 and 96 weeks, especially when you’re staring down the barrel of that period from the outset. Just as it’s difficult to visualise what exactly a thousand of something looks like (try picturing a thousand sheep, for example, and see how far you get) it can be hard to tell the difference when that difference is in the dozens of weeks. 


Don’t worry, though. Even though it’s a total pain in the neck, it’s an entirely ordinary ordeal for most people, and a necessary evil. However, the strange thing is, even those who can afford to pay off their car loan early, don’t. They uncompromisingly continue to stick to the payment terms, potentially wasting thousands of dollars. This usually comes about because people aren’t aware of how exactly they can go about paying off their car loan quicker. Many of them aren’t aware of the simple strategies that can be followed in order to facilitate this financial decision, while others may have been poorly informed in the past and as a result aren’t too keen on even beginning the process. 


Fortunately for all concerned, we’re here to tell you that there are a few tactics you can employ to make paying back your loan quicker. A few simple habits can change your life dramatically. Before we dive into the list of strategies, however, it makes sense to talk briefly about why exactly it’s such a good idea to have the loan paid off early.


Why You Might Want to Pay Your Loan Off Early


A calendar opened on a table


The most obvious advantage to getting the loan paid off early is the fact that you’ll have the entire weight off your mind, for good. No longer will you need to worry about credit repair, nor about the telltale sound of the bill being slipped through your letterbox. However, the benefits of paying it off before the period is up extend far beyond credit repair and your own peace of mind.


Imagine your car breaks down, for example. Obviously, you’ll need to take it to a mechanic. However, if you haven’t paid off your car loan, you’ll essentially be shelling out more money for maintenance on an item you don’t even own. It doesn’t take a financial wizard to figure out that this is hardly the ideal situation, and if the problems compound, you may be stuck with a few hefty bills to be added on top of the loan itself. 


Moreover, knowing that the loan is paid off will be an incredibly freeing thing to realize. You’ll be able to more effectively plan for the future — whether that involves a period spent engaged in credit repair or not — because you’ll know that one of your most serious financial commitments has ceased to be. Indeed, this can go so far as to create an entirely new lifestyle for you, as you’ll be able to aim at vacations and other treats in a way you probably couldn’t before. If you don’t have a mortgage or credit card bills (if you do, take care of those immediately, since it’s the most important credit repair technique of the lot and will make a huge difference to your score) you’ll basically be entirely free. Doesn’t that sound great?


Perform Some Mathematical Magic


Somebody using the calculator on their phone.


The only magic trick you need to learn is to round every payment you make up to the nearest hundred. If you’re not totally stuck for cash but aren’t quite able to double your payments (see the point below) then maybe rounding up to the nearest hundred is the better option.


For example, if your current car payment is $367.54, the idea is to round it up to $400 instead. It’s highly unlikely you’re going to miss that spare cash when mentally you’ve committed it to the loan anyway. It’s a painless way to pay more on your car loan and actually helps you visualise your budget better. Lovely round numbers are always more comfortable, whether that’s for credit repair or for paying off your loan.


Crucially, make sure that you’re committed to the process in the long-term, as that’s the ticket to paying off your car loan in record time. Of course, if you could apply all of these tips, then you would be laughing all the way to the bank. Small, proactive decisions can make such a difference in your finances.


Consider Switching to a Bi-Weekly Payment Plan

If you’re financially savvy, your car payments — and ultimately your total debt — should never take you to the brink of financial ruin. Hopefully, you have planned well, and you can comfortably afford your car payments. If you are fortunate enough to be in this situation, consider doubling your current payments. If you’re not, however, try adopting some credit repair strategies, such as paying off as many of your debts in full and on time as possible. By fixing your score, you’ll be making everything easier, from interest rates to loan terms.


Did you know that for the first year of payments on any loan you are likely to be paying off solely the interest and not making a payment on the physical asset which is your car? This is especially true if your struggling score is in need of credit repair, and you haven’t had the opportunity to build it up again yet. You don’t actually ever physically own your vehicle until the loan is paid in full, either. So if you find yourself in financial difficulties during the deal, the loan company could repossess your car — hardly the dream situation.


It’s hard for people to visualise and grasp the concept that paying more than you should in the short term ultimately means you’ll be paying less in the long run. It’s one of those funny little quirks that humans trip over time and time again. By doubling your payment each month, it increases your payment each year. But it gets better: when you account for unpaid interest charges, your car payments will be miraculously paid off, in more like a third of the time of your original loan terms. 


Getting Together a Little Extra Income


Somebody using a phone and a laptop at the same time

We can feel you rolling your eyes, but stick with us here. Before you scoff at the idea, what if we told you that securing extra cash in Toronto is a lot easier than you might think — and that it’s something that can happen simultaneously with credit repair?


Firstly, we recommend selling things you don’t use, you’ve never needed, or are saving for a rainy day. Hold a garage sale and sell these useless items that have been kicking around and getting in the way. Things like books and clothing all sell amazingly well on Amazon and eBay, and you’ll be shocked at the prices they fetch. 


This goes beyond knick-knacks, however: in all areas of your life, try to figure out which unnecessary expenses you have, and try to resolve them. Do you have subscriptions for services you no longer require? Do you buy the local newspaper when all the news you need can be found online? Or maybe you have a gym membership that you’ve never used? Whatever it may be, there are no excuses. It’s time to trim your expenditure. Your finances need to be lean now to help your savings grow in the future — for credit repair purposes, as well as to aid you in paying off your car loan that much quicker. 


The main point we want to get across is that you should be spending all your spare cash on your car loan. We should hasten to clarify that we do mean spare cash and not money you need to pay the mortgage, put the kids through college with, or the cash you need for medical insurance. Additionally, if you already have a second income, consider using that money to bring down your car loan payments. It might be tempting to spend what spare cash you have on the latest gadgets or order your favourite takeaways, but you’ll be glad you didn’t once you’re free of the burden of your car loan. This is a multi-purpose financial habit that you’ll be glad you picked up now in a few years, for credit repair reasons as well as for any other debts you may incur on your journey.


A Few Words on Financial Philosophy

The majority of Canadians live from paycheque to paycheque, and we completely understand. However, it can’t be overstated how crucial little adjustments to your finances can make over the long term. A few dollars here and a few dollars there will ultimately lead to a much stronger financial position. From a stronger financial position (like the one you’ll get to if you can get going with credit repair) you can negotiate better deals on your next car loan. Continually monitor your finances — you may not be able to afford it now, but circumstances change, and you need to stay in the fight constantly. It’s an exercise that requires patience and careful planning. Above all, remember that it’s a marathon, not a sprint.


Purchasing a car is a commitment you likely planned for, but sometimes problems do crop up. If you can afford to get ahead of your payment plan, it actually makes life a lot less stressful. For example, if the refrigerator breaks down unexpectedly, the odds are you’re going to need to purchase a new one. This type of scenario is never easy and usually requires a trade-off. Something else from the endless list of expenses will need to be sacrificed. Being left out of pocket might mean the car payment will have to be missed. 


However, if you’re well ahead on your payments in the first place, you do not need to worry. You might well find that these loan companies can actually be quite flexible. People imagine them to be tyrants, but at the end of the day, you signed a deal which promised you could pay back the money they borrowed you. Getting ahead of the loan makes nasty surprises less significant. Getting ahead of the car loan essentially means less stress and worry, and that’ll translate to a more enjoyable life all around, for you as well as for your nearest and dearest.



It can sometimes be challenging to obtain approval for a car loan, especially if you have a bad credit score. Here at, we do not prioritise customers based on credit scores, and we encourage everybody to take part in credit repair as much as possible. Each application is considered on its own merits, so if you’ve been having difficulty, please send us an email or give us a call. We are happy to help.

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