The Truth of Credit

Let’s face it, for most people in New York City a car is a necessity. Unless you are Amish or under the age of 16, you probably either have a car or need one badly. The problem is coming up with $10,000 to $50,000 for a new car is not easy to get for most of us. In fact, the majority need to borrow from parents or personal savings just to get a down payment. Then on top of that, you will need to finance the debt with a bank for the remaining. Nothing new there, right? Well, being in debt sucks, anyone will tell you that.  So what are some way I can accelerate my repayment?

With the quickness:

• Pay more each month: Duh, seems obvious, but some loans make you pay penalties for paying debt sooner. You’ll find that a majority of the finance companies make most of their money in the first 36 months of a car loan. The sooner you can start paying these loans down, you’ll be thanking your self 5-6 years later.

• Make Bi-weekly payments: This may go hand and hand with the suggestion given before, but you’ll find that if you are able to split your payments, you may be able to pay more each time which has a snowball effect.

• Getting another job: Look, I’m a big believer that you work to live, not live to work. So I have a tough time with this one. However, if getting out of debt is a major priority for you this step can only help. I implore you to really think about this because there are major benefits and consequences to this.

Now, before you comment, I know this sounds overly simplified but really it is. There are no tricks. There are options like refinancing, which can and could save you money but you really need to do the math. Not all deals are created equal. Also, a car loan, unless it is outrageous, should be one of the last debts you pay down. If you have credit cards or loans that are accruing interest at 20% plus you need to focus your efforts there first.

Is your car paid off? If so, how long did it take?

Related posts:

1. What Would You Do Without Any Debt?
2. Who is to Blame?