Should you pay your car loan off early?

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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?
— Trish

Dear Trish,
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.

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If you have a car question, email it to us at Driving for Dollars. Read more Driving for Dollars columns and Bankrate auto stories.

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