![]() You have several options for paying off your loan faster than scheduled, so consider which is right for you and start planning. Take advantage of loan amortization and get your loan paid off sooner. ![]() Also, you aren’t strapped into a higher monthly payment, so if your finances change or if you got used to a certain monthly payment, you won’t be stuck paying hundreds of dollars more for a shorter loan period. Then, you pay off your principal faster, which means you end up paying less in interest. First, your interest rate is lower to begin with. When done right, this reduces your interest payments in several ways. ![]() It’s hard to predict when to refinance, since the market is constantly changing, but a financial planner and refinance calculators will be able to help you choose the right time to refinance. Interest rates need to be lower when you refinance than they were when you got the loan, or refinancing is a bad option. Then, apply what you save in interest payments and any extra payments you can afford to paying off your principal by making extra payments each month. Excel: Loan Amortization for car or house loan by Chris MenardĬonsider refinancing to get a lower rate, but not a shorter-loan term.
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