How Can I Cut My Car Payments by at Least Half?

Paying off a car loan can take a considerable chunk out of your monthly earnings. Perhaps your circumstances have changed since you took out the loan -- maybe your hours have been cut or the interest on your mortgage has increased. This can be the difference between making ends meet and going further into debt. If you're finding your payment schedule to be too much, it is possible to cut your monthly spending on your car loan.

Instructions

1

Contact your current loan provider or read through your agreement to establish whether you will be charged a fee if you pay off the loan more quickly. Some lenders apply a charge if you pay your loan off ahead of time to compensate them for lost interest. You could also consider calling the loan provider to ask whether it would consider lowering your monthly payments. The provider is likely to say no, but if the provider agrees, be warned that this will affect your credit score and impact your ability to secure credit elsewhere.

2

Sign up to receive a copy of your credit file from the three major credit-rating agencies, Experian, Equifax and TransUnion. Consumers can get one free report per year from each agency.

3

Study your report and make sure that there are no errors on it. If you find any anomalies contact the agency and have them corrected. Make a note of your credit score. If it's over 700, your score is considered good. Below 620 is considered risky, and things go downhill from there. Any entries on your report that show false late or missed payments can impact your credit score and your ability to secure further credit.

4

Contact your bank or go online to find out about which loan products are available to you. If your main priority is to cut your monthly expenditure, look for a loan that offers a longer repayment period than your current agreement. Do your research and find a product that will allow you to cut your monthly repayments by at least 50 percent.

5

Apply for a loan that will reduce your monthly payments by the desired amount.

6

Pay off your current provider with the funds loaned to you by the new provider. Set up an automatic bank withdrawal to pay the monthly installment.