5 Tips to Paying Off A Car Loan Early – How I Paid 0K in 34 Months

Learn what worked and what didn’t. Paying off a car loan early is no small fest. I’m not telling what to do! I’m showing you what I did!

What’s up my people and thanks for tuning in today i’m gonna share with you the system i use i’m a lay out the step by step plan that i implemented to pay off my truck 50 months early that’s right i went out and bought me a brand new truck you see i deserved a new truck i’ve been working hard and i was driving a fixing ride you know what a fixer ride is that’s

Where you got to fix the car and you can ride a little bit you go a little knee you gotta fix it again and then you can go a little further you know why most people’s putting gas and oil in a car i had to put a new watch net in then i can drive a little bit then i had to put a new water pump on and i can ride a little bit until the head gasket blew you know how to

Put a new hair gas in and i can keep going this was turner i felt like i worked hard i had two jobs i had good income why not i deserve and then this happened i went to the dealership and found me a beautiful brand-new 2016 f-150 xlt with all the features that i wanted then it was easy i convinced myself that i deserved it then i convinced my wife now we can afford

It then i just convinced the back to give me some money nah i’m just jumping you know the bank’s getting that money real quick took like 30 seconds and they wrote me a blank check and said mr. edwards go out buy the car of your dreams we’re here for you we have your back and off i went down to the dealership to get my new car and i drove home as happy as i could

Be i paid forty thousand one hundred and thirteen dollars and i didn’t put no down payment down finances thing for seven years eighty four months at four point nine nine percent interest because how else are you gonna make these payments makes sense right see it wasn’t buying the car that got me in trouble off it was how i bought the car now i see you looking at

Me don’t look at me like that don’t look at me with them judgy eyes because i’m not alone check this out linden tree put out a report in january of 2020 and here’s what they found with garden car loan debt in america the average monthly car payment in the u.s. is five hundred and fifty dollars for new vehicles over all americans all more than 1.2 trillion dollars

In auto loan debt that’s just shy in a 1.5 trillion we owe through london do we love our cars as much as we love our education hmm america’s borrow an average of thirty two thousand four hundred and eighty dollars for new vehicles and financing for an average of sixty nine months the average price of a new light duty vehicle is thirty eight thousand nine hundred

And forty eight dollars boom so you can see i’m not alone and knows was just the averages that means some people was lower some people was hired so i am not alone it didn’t take me long after buy this car to get sick of the car payment the new car smell was gone it was already talking about changing the body style and i basically all spent a lot of money to drive

An old car so it was obvious i even had to do something like get rid of it or i had to get it paid off and here is the steps i used to pay off this 84 month loan in just thirty four months the first thing i tried to do was sell it that’s right i put it into a car max to get one of those quick cash pulls and in about thirty minutes they came back with a number it

Was a pretty nice number so hey i’m down here at carmack’s and no no no i’m not i’m not buying a car no no no no look i’m down here and i got a cash quote for this car they said they’re gonna buy this truck for me they’ll give me twenty seven five four wheeling oh twenty nine so you know really i paid fifteen her that we can be done what i told you not to buy the

Car demon we couldn’t afford but you bought it so we gonna pay for and that was the end of that idea so the first one i could have got rid of you just wasn’t gonna work i couldn’t just sold it and got rid of it but that might not be an option maybe you’re upside now too far and you can’t sell it or maybe you really like it and you just want to keep it but that is

One way to get rid of it so keep that in mind so with us deciding to keep the car we knew we had to get rid of the deck and the only way to do that is to work the system there’s a lot of different systems out there but two of the most popular ones is the day avalanche and the debt snowball and the devil and create lists your debts from smallest to largest based off

The interest rate and you start pan the one with the highest interest rate and you pay minimum payments on everything but that one with the highest interest rate you’re gonna hit that one with everything you got and when that was gone you’re gonna take that minimum payment roll it into the next one and keep it going until you get everything paid off the other system

Which is called the debt snowball is where you list your debts from smallest debt all the way up to the largest based off the balance and you’re gonna pay minimum payments on all those debts but the one with the smallest balance is gonna get your undivided attention you’re gonna pay the minimum payment plus anything extra that you can come up with we decided that

For us we were going to use the debt snowball now in our situation we didn’t just have the car we had a mountain of debt the car was just one of many things but either way it’s important to work a system and for us it was the debt snowball so we started working on our other debts because the car was at the top of the list and we worked our way through and was able to

Pay off all our other debts finally after almost two years we was able to pay off everything but the truck and we made a lot of mistakes along the way so many that i made a video just about the mistakes we made you can see it here or here or i’ll link a car up here this video walks you through all the mistakes that we made in our journey and if you watch it you’ll

Be able to learn from us and speed up your debt free journey but nonetheless we had a system in place we started working it and eventually we was able to get to the truck so remember try to sell it if that don’t work and you’re gonna pay it off then pick a system and stick with it now you have a system in place and you’re focused on your debt now how are you gonna

Get the debt paid off well you need some extra money the only thing that pays off debt is money so you need to find some extra money somewhere now this could be under your couch cushion you could trade in all your stamps or baseball cards you can save in you can have a garage sale what i did was i had a part-time job and i use that income to start paying towards

The debt plus all the other stuff like budgeting correctly cutting out large expenses cutting lifestyle back we did all of these to be able to make more money available to be able to go towards the debt so this is a great way to put extra money towards the debt but here’s something else that you may have available to you and that you might be sitting on a large

Pile of money and you may have this money sitting over in a savings account maybe you’re saving up for something big or maybe there’s just some money you’ve had and you just work hard to save and it’s just sitting there and i know i know it’s hard to let go of money that you work so hard to accumulate i mean saving money is not a easy thing especially when you

Have a car note but i’m telling you if you take that money out and you put it towards this car you’re gonna get done just that much faster and if you’re hesitant about doing that you have to really act yourself are you really committed to paying this car off do you really want to keep this car or just having this pile of money more important if having that money

Is then maybe it’s time to go back to the first one and sell the car now for us due to a relocation through the work we actually had a pile of money saved up to help us with the transition now once we made the transition everything was good to go we were sitting on $9,000 and we looked at each other and it didn’t think but about two seconds for us to say put it on

The car and this worked out perfectly because at this point we have paid everything else off and we was down to just the truck it feels so good to make that payment and it took that truck pan from the 20s to teens and now he was really feeling like we can do this we got this let’s go so we started putting everything extra we had on his truck and since it was our

Only debt we was making two three four five payments a month it felt so good to start knocking his truck out finally now that takes me right into tip 4 tip 4 is make sure that you’re making a principle only painting see this guy that’s the first time who’s so excited that we was about to make some extra famous that we just click the button and if my bank is like

Most banks which i’m sure it is what happens is when you make a payment if it’s an extra payment they just apply it towards your next payment due date so you’re not paying the vehicle off you’re paying it up and we’re not trying to pay it up we want it gone so what that means is you have to find that principal only button because car loans are inches long meaning

That the interest you pay is calculated for that month so when you make a principle only payment you’re bringing that balance down and when they go to calculate the interest they’re gonna calculate off the lower balance whatever it is at that time that’s the beauty of making those principle only payments like check out these payments that we was making principle

Principle principle principle principle all of that was lowering our interest rate by doing this the year before we started paying off the extra payments we paying around 1900 dollars in interest the next year we paid $1,200 and the last year or we paid the last $14,000 because we was so heavy on the principle payments we only paid eighty four dollars in interest

That year so this is huge because if you look at your truth in lending statement it’s going to show you how much you borrow what the interest is and how long you’re going to pay it and then over here it’s going to show you what the total of all that is and what you don’t want to do is just make extra payments on your vehicle until you pay it all the way off because

I would have to make our 84 payments but since we’re paying off our vehicles early right me and you we’re paying it off early that means that you’re not gonna make 84 payments which means you’re not gonna pay all the interest that was originally calculated i pay my life in 34 months which means i paid thirty four months worth of interest so you’ve got to make sure

That you hit that principle only button every single time you hit an extra payment now my final tip for you it’s stay focused stay focused because this is gonna be a journey it took us almost two years just to get to the truck so that’s a long time to be head down grind up and using all your available cash in all your motivation to pay on a day it’s gonna be a time

Where you want to quit it’s gonna be a time where you want to give up is going to be a time where life is just going to hit you with a curveball and feel like a gut punch and it’s just throwing you off track and you start thinking what’s the point but in these times i want you to look ask the payments and think what it’ll be like once you get done because being on

The other side of that is in an amazing place for me i look at it now and i’m like my truck friend was $568 now i’m using that same truck payment to fully fund a roth ira and put money in my pocket also since i don’t have debt famous anymore now i’m actually earning interest instead of paying it so it’s beyond work this to do this it don’t matter what your interest

Rate is it doesn’t matter the term it doesn’t matter the cost if you’ve decided that you’re going to keep the vehicle and that you have the ability to pay it off then just stay focused and do it i hope you like this video if you did go ahead and hit the like button if you didn’t give me a comment down below we could talk about it also be sure to subscribe to the

Channel so you can get more content just like this until next time i’m diamond peace

Transcribed from video
5 Tips to Paying Off A Car Loan Early – How I Paid $40K in 34 Months By Diamond EdwardsliveBroadcastDetails{isLiveNowfalsestartTimestamp2020-04-09T193925+0000endTimestamp2020-04-09T195315+0000}