Dear Driving for Dollars,
I have a car loan with a high interest rate due to not-so-good credit. I’m doing OK financially now. Should I pay it off early to save money?
If you can put extra money toward the principal on your car loan every month while still maintaining your other financial obligations, this is probably a good idea since you say your interest rate is higher than average. However, keep in mind that you’ll need to add a sizable amount — generally at least $100 — to your monthly payment to make a significant impact. To see how much you will save, use Bankrate’s car loan early payoff calculator.
Ask the adviser