Can I Split My Car Payment Into Two? We have reviewed the disadvantages of paying off a car loan early on this page for your satisfaction. You can browse the page for how to pay off car loan in full. If you want the weekly car payments calculator, then this post is most suited for you.
Has your financial situation changed since you bought your car? With two-thirds of new car loans now lasting six years or more, according to Experian data, there’s a good chance it has. Perhaps you bought your car flush with the excitement of landing your first entry-level job. Now you’re a manager with a bigger salary and an annual bonus. With extra cash on hand, should you pay extra on your car payment? You can pay more on your car payment in many cases, but before doing so, make sure you fully understand the effects it will have on your auto loan, your credit score and your personal finances.
disadvantages of paying off a car loan early
Can I Split My Car Payment Into Two
Before you schedule that extra payment on your car loan, you need to find out whether your lender applies the payments to your loan principal or to the interest.
Applying extra payments directly to the principal (that is, the amount of money you borrowed) is ideal because it reduces both the amount you owe and your total interest. (The exception: If your loan has precomputed interest, meaning the total interest was calculated and fixed based on the term of your loan, you’ll pay the same amount of interest no matter how quickly you pay off the loan.)
However, many lenders don’t apply your extra payment amount directly to the principal. Instead, they’ll apply it first to the additional interest accrued since your last payment, and only then to the principal.
What if you make a whole extra payment instead of just adding a little bit more to your monthly payment? Unfortunately, many auto lenders will treat this as an early payment of your next bill instead of applying it to the principal.
If you want to make sure the extra payment will be applied directly to your loan principal, find out exactly what your lender requires to do so. You may need to specify your wishes in writing, check a box online or even mail your extra principal payments to a different address.
Benefits Of Paying More On Your Car Payment
There are a couple of reasons you might want to pay extra on your car payment each month.
- You’ll pay less interest overall. If you have a 60-month, 72-month or even 84-month auto loan, you’ll pay quite a bit in interest over the loan term. As long as your loan doesn’t have precomputed interest, paying extra can help reduce the total amount of interest you’ll pay.
- You’ll pay off your loan faster. The faster you can pay off your loan, the sooner you’ll have extra cash to toward other needs, such as a down payment for your next car, paying off credit card debt or saving for your summer vacation.
What To Consider Before Paying Extra
Before you pay extra on your car loan, however, it’s important to consider these questions:
- Does your lender allow extra payments? Some auto lenders prohibit early repayment altogether. Others charge prepayment penalties, which can eliminate any savings from making extra payments. Check with your lender to find out what your loan terms allow.
- Do you have other, higher interest debt? In general, auto loan interest rates are fairly low compared with, say, credit card debt. For example, the average credit card interest rate is currently 17.86%, while the average interest rate for a 60-month new-car loan is 4.73%. If you have extra money, use it to pay down high interest debt before tackling low interest debt.
- How will making extra car payments affect your budget? Make sure the extra payments won’t stretch your budget to the breaking point. If you end up short of cash, you might be tempted to put expenses on your credit card, creating high interest debt.
- Could this money be put to better use? Depending on your current needs and future plans, there may be more productive uses for your money than paying extra on a car loan. For instance, you might want to increase your 401(k) contribution, build up an emergency savings fund or start saving for a down payment on a home.
How Paying More On Your Car Payment Affects Your Credit
Paying more on your car loan affects your credit score—and not necessarily in a positive way. Here’s what you need to know.
If you make an extra car loan payment once or twice, it probably won’t impact your credit score at all. However, if you consistently make extra payments and pay off your car loan early, it can actually hurt your credit score—especially if you’re just starting to build credit, don’t have many credit accounts or are trying to improve your credit score.
Once your loan is paid off, the account will be closed. Although closed accounts may show you successfully managed credit in the past, open credit accounts have a greater impact on your credit score because they show lenders how well you’re managing credit in the present. Your credit score also takes into account how long you have been using credit, so if your auto loan is your oldest credit account, closing it can hurt your credit score.
Closing your auto loan may also reduce your credit mix—that is, how many different types of credit you have. Car loans, mortgages and student loans are installment loans, meaning you borrow a fixed amount and pay it back in monthly installments. Most credit cards are revolving credit, meaning your payments are based on how much of your available credit you use. Having a diverse mix of both installment and revolving credit can help to boost your credit score. If your car loan is your only installment loan, it’s better to keep it open than to close it early. Learn more about what affects your credit score.
Finally, paying off your car loan could hurt your credit score if all of your other credit accounts have high balances. That’s because credit utilization ratio (how much of your available credit you actually use) is a factor in your credit score. Find out more about how paying off a car loan early can hurt your credit score.
weekly car payments calculator
Make The Smart Decision
As you can see, there’s a lot to consider before you decide to pay more on your car payments, including your lender’s terms, your financial needs and your credit score. To check your credit mix, credit utilization ratio and credit history, you can get a free credit report from Experian. Once you’ve got the scoop about your credit score, you’ll have a better sense of whether paying extra on your car loan is really a good idea.
BEST SITES LIKE ALIEXPRESS FOR ONLINE SHOPPING
AliExpress is a massively popular Chinese online retail service owned by Alibaba Group. It was launched in 2010 and hasn’t stopped its journey to becoming the ‘biggest online marketplace of the world‘ ever-since. AliExpress stands toe-to-toe even with Amazon in terms of buyers worldwide. It offers wholesale goods at direct-to-consumer prices from Chinese sellers.
It also works as a great dropshipping model for a lot of e-commerce entrepreneurs. Along with a lot of good sides, AliExpress has some cons as well. The biggest problem is the shipping time of AliExpress orders, which is pretty long considering the goods come from China. Also, some orders can be very expensive after shipping charges and taxes.
So, it is a good thing to have some AliExpress alternatives whenever you don’t like its services. That’s why we are telling you about 21 best sites like AliExpress. Some of these websites offer cheaper prices and faster shipping on certain products. And, you can also use them to maintain a nice profit margin for your dropshipping business.
LightInTheBox is the perfect AliExpress alternative as it is also a Chinese e-Store. It sells hot and trending products across the globe. Their products range from phone and electronics to fashion, jewelry, shoes, bags, and many other items. You can find almost anything here at a very cheap price.
The delivery time of LightInTheBox is also similar to AliExpress as their warehouses are located only in China. But, you may get a faster shipping time due to having fewer orders to ship. You can pay for your orders with PayPal, Western Union, or your credit card.
Wish is a widely popular online marketplace where you can buy almost anything. From clothing to footwear, electronics, healthcare items, and many more things, you can get them all for an incredibly cheap price. They are also known to offer great deals and coupons to their new customers.
Their shipping time is also faster than AliExpress as their products come from sellers located in small countries. Wish also provides an advanced rating system that is very helpful for both the consumers as well as sellers. It helps promote good ones.
Overstock is a US-based online marketplace. It makes profit by selling wholesale products at a highly cheap price tag. A major portion of their stock is comprised of overstock from the major retailers or their seconds. You can find some really amusing deals here. The shipping time will also be lower as compared to the Chinese marketplaces. You can get your items within a week.
The product range of Overstock is incredible. You can find everything such as clothing, decor, kitchen appliances, and many more items. You can even find furniture and other big home items. So, you can use to fill your house with great stuff at a reduced price.
DealeXtreme, more popularly known as DX, is an amazing online marketplace. The website works in a very similar manner as ‘Wish’ and sells cheap products coming directly from sellers. It has partnered with many small businesses and sells its products to a wide base of audience.
The shipping time is a problem with DX also because their warehouses are located in China. Apart from this, you can get some really worthy deals on DX. You should always keep an eye on their clearance sales for the best prices.
Gearbest is the perfect AliExpress alternative if you are looking to shop for the latest gadgets or electronic devices. It works with over 5000 Chinese brands and top suppliers to deliver the best products. It has products from top Chinese companies such as Xiaomi, Huawei, Lenovo, and many others. But, it isn’t just an electronic store.
You can also find a massive range of other products as well. The prices available on GearBest are reduced, and you can even reduce them with the available coupons. They also have warehouses in multiple countries. So, you can get faster shipping from the local warehouse.
BangGood is another Chinese e-commerce platform that provides worldwide shipping of cheap goods. You can find almost anything on this website, from clothing to electronics, and even home items. The prices available are marked down from their original prices. You can also get amazing deals during special clearance sales.
BangGood provides a free $20 coupon to every new user. The shipping time for BangGood orders is faster than AliExpress for certain products. However, the regular shipping time is similar.
ChinaBrands is a widely popular Chinese e-Store where you can buy products at wholesale prices. You can find almost anything on this website at a highly affordable price. Their shipping prices are also low but you will get a long shipping time. It is the perfect website for buyers who want the lowest prices but can wait for their orders for at least a month.
Most of the ChinaBrands sellers run their factories from China, and their warehouses are located there only. This is the reason for the considerably long shipping time.
Bonanza is a unique American online marketplace where you can find a great range of products. They have over 20 million items from more than 50,000 sellers. It is a growing e-commerce store where even you can sell your items. It is a preferred platform by more than 20,000 entrepreneurial sellers. You can find some really amazing handcrafted items and collectibles here.
For people looking to shop regular items, this store may disappoint you a little. The prices of some items may be a little higher than some Chinese stores. But, the quality provided will be worth it.
21 ALIEXPRESS ALTERNATIVE STORES
Here are 21 AliExpress Alternatives that you can use to shop online.
- DealXtreme (DX)
- American Greenwood
AliExpress is amazing but it is always good to have options when you are shopping. So, these are the 21 best sites like AliExpress. If you ever feel like you should look somewhere else, these are some stores that you should visit. You can also use these for your dropshipping business if you are an aspiring entrepreneur. Make sure you have a solid plan before beginning.