PAY OFF CAR LOAN EARLY | PAY OFF DEBT FAST | HOW TO PAY OFF DEBT FAST | Millennials In Debt

according to linden tree calm the average person takes about 65 months to pay off a loan for a used car and I am so happy to say that I am NOT a part of that group I paid off eighteen thousand dollars worth of a car loan in thirteen months and it watch this video I'm going to tell you exactly how I did that so for the first part of this video I want to give you six tips to aggressively pay off your car loan and tip number one is have a realistic budget if you have a car loan of $20,000 and your annual salary is $30,000 it is unrealistic to think that you can pay your car off in a year okay it's just it's unrealistic for me personally throughout this year of me paying off my car I took home about $3,000 a month about 1200 of that went towards rent and then utilities I had a student loan that I'm paying off still paying for the car payment itself was four hundred and thirty dollars and 19 cents you know had to pay for things like food gas oil changes when those things popped up entertainment shopping like it's not to make life happen you know so once I had to pay for like everything or once I had paid for everything I had to pay for I had like maybe a thousand like around a thousand to put towards this goal of paying it off if you do the math that doesn't equal eighteen thousand dollars in one year so I'm gonna get into that later talking about how I exactly did this but I had about a thousand dollars that I knew I had to put towards the loan every month in order to achieve this I'll talk about the particulars later but yeah set a realistic goal for yourself tip number two cut out anything that you don't actually need when i was doing this i found that i had subscriptions like $20 monthly subscriptions to things that i wasn't even using i found cheaper ways to get what i certain things that i wanted i tried to sell things i didn't really have anything of value to sell but if you have something valuable that you don't really need anymore get rid of it sell it Craigslist whatever you whatever how you want to do that make it happen just get rid of things that you don't actually need anymore if you have certain vices like you smoke if you drink i don't know your daily cup of coffee whatever it is that you think that you have to have all the time you don't actually have to have it all the time you can get by without it so that's why to cut out little frivolous things that you don't actually need tip number three have a side hustle for me my side hustle is photography I've been a photographer since 2011 it's just a easy way for me to make some quick money and that was a big help of me being able to achieve this goal of paying off my car in a year so whatever hidden secret talent that you have learn how to monetize that and create a side hustle tip number four if you have things that you financed into your loan that you don't actually need some of those things you can get your money back so for instance I got gap insurance I'll try to like quickly explain so let's say that you owe $20,000 on a car that's only worth fifteen thousand and then you got into a car accident and you totaled the car the gap insurance will cover that five thousand dollar gap between what you owe and what it's worth after a certain point I paid down my car so I owed less than what the car was worth so I didn't need gap insurance anymore so I called up my dealership and I them to cancel it they they don't want to they don't want you to cancel it because they want that money but they have to if you request it so you go into the dealership you sign a piece of paper and within a few weeks they put the money towards your account so for me I got like close to 900 dollars back so that was money that did not have to come out of my pocket but still went towards this goal so you can cancel things like gap insurance you can also cancel something like an extended warranty if you want to so those are some options of things that you can cancel if you want to if you feel like you don't need those things anymore tip number five stay focused don't let anything or anyone distract you from accomplishing this goal throughout this year I didn't go on vacation I didn't go to any events I wasn't I didn't I wasn't doing like hundred dollar trips to target anymore I wasn't buying anything I was at home okay I was at home eating food that I had already had that I cooked or you know if I was eating out it was the places like Wendy's or cookout you know like cheap fast food places I wasn't going to anywhere that required you to eat inside okay drive through everything just really really cheap food anyway stay focused remember why you did this remember why you started for me I was so mad at getting that car I knew that it was a rushed decision I probably could have found something cheaper I could have found something I had better miles you know like I was just mad at getting it at getting the car so that was my why like I was truly pissed like I was upset every time I had to pay a payment on that car so I was just like I'm not suffering through this for four years I'm gonna get this done as quickly as I possibly can that was my why figure out your why stay focused don't let anyone stop you from achieving tip number six principle payments say it with me people principle payments that is probably the most important tip of all because you cannot pay off the car fast or ahead of schedule without making principle payment if you don't know so like a regular payment let's say so every month I had to pay four hundred and thirty dollars and nineteen cents as a regular payment so out of that maybe three hundred of it went to the loan but the other one hundred thirty dollars and 19 cents went towards interest but if you make a principle payment the entire amount is going directly to the loan and nothing towards interest and that's what you want because the lower that amount is the lower your amount towards the interest is that makes sense so okay let me say it again the lower your principal amount is the less money you have to pay towards interest that's a better way to say it yes so at the beginning I was putting like $100 towards interest but by the end like six dollars went towards interest like it wouldn't it became really really low because my balance was really low so principal payments people every month I made a regular payment but I would also make a huge principal payment sometimes I would make two principal payments that's how you win that that is truly the best tip a principal payment so those are my tips and now I'm gonna turn the screen around we're gonna look at my computer and I'm gonna show you every single month how much money I put towards my car i financed a 2016 Honda HRV the original finance amount was eighteen thousand three hundred and eight dollars and thirty-six cents okay excellent start at the very bottom as you can see my first amount or my first payment was four hundred and thirty dollars nineteen cents that is my mandatory monthly payment and this was what I was talking about the interest was a hundred and thirty three dollars and seventeen cents and the rest went towards principle that interest man that that is what gets you so I did that on July 20th 2018 July 31st I made a principle payment of one thousand two hundred and sixty seven dollars in 47 cents that came from my side hustle photography so I had been you know I'd done different photography jobs for the past like year or two and I just I'm a natural saver I just never spent the money that I made from the photography saving it for a rainy day well it rained in the form of a car payment so I used like all the money that say from my side hustle and I put it towards a principle payment towards my car so that's what that amount is September no that's not September August no Jesus no yeah that is August okay August 20th my next mandatory payment four hundred and thirty dollars nineteen cents but see how much the interest dropped in one month because I made such a huge principal payment it went from one hundred and thirty three to eighty six that's a huge difference September fifth I made another principal payment 185 also September fifth I made a different principal payment of a hundred dollars of $1,100 so $1,100 I can't I honestly can't remember where that money came from I don't know that's more sigh hustle money or if that was money from like a savings a different savings account that's not side hustle money I'm not I'm not really sure I was making YouTube videos about budgeting back then so if I find an old video explaining what that is I'll like leave that in the description but yeah I'm not really sure where that came from but I will point this out I do not have a sugar daddy there's no one in my family who gave me any money towards this I at the time of doing this I was 25 for half the year and 26 for the other half of this just a single woman with the job making sorry making this stuff happen on my own so yes I did this completely on my own with my regular job and side hustle money anyway September 20th another regular payment interest has gone down to $79 October 11th principle payment 430 another principle payment that same day of $200 September 20th mandatory payment interest has gone down to 70 October 30th another principle payment of 290 October 31st principle payment of 140 11 or November 20th mandatory payment interest has gone down to 67 November 29th principle payment 200 December 20th mandatory payment and interest has gone down to $62 as you can see only one payment was made in the month of December the mandatory one and that's because it's christmas and i had to get gifts for people also i bought this car in july and i also had to pay i do like a six month car insurance so the car insurance was due this month so the money went towards that so i could only put the mandatory payment this month July 20th another mandatory payment no extra payments that month either and you know guys it happens that's why you go super hard some months because there's gonna be some months where life happens and you're not able to give extra towards your debt February 5th though made a principle payment of 215 I also made another principle payment of 250 or was that okay February 20th mandatory payment interest is down to 59 February 28 principle payment of 164 March 2nd principle payment of 250 March 11th principle payment of 519 principle payment of 158 March 19th principle payment a 600 girl you are just killing it what is what is it happening in March oh maybe that's tax refund maybe that's where some of that money is coming from because that's a pretty big amount this 250 I'm pretty sure that's from a side hustle that 600 I bet yeah that spring time it's probably tax refund March 20th regular payment of 432 $48 now March 25th I made a principle payment of $389 I got back pretty nice April 10th principle payment 334 dollars April 20th 420 in mandatory payment interest was down to $41 May 20th mandatory payment interests is down to $34 11th principle payment of $4,000 so let me explain so the entire reason I got the new car is because my old car was totaled I was in a car accident that I did not cause oops I did not cause that accident but my car was totaled so I had to get a new car I got money back for the value of my old car and that's where this four thousand dollars came from I cannot give you a good sane reason as to why I didn't use that four thousand dollars as a down payment for this new car I can't give you a reason but I didn't and I just held on to that money I'm using it kind of as an emergency fund in case anything else happen nothing they ever did and I finally decided to put that money as a principle payment so that's what that $4,000 is from then June 20th mandatory payment interest has down to $28 yeah August no this is July yeah July I made a principal payment of $400 July 16th another principal payment 150 July 18th principal payment of 385 July 20th mandatory payment the interest goes down to $10 y'all and then August 7 2019 I made my last payment towards the car one thousand and three dollars and 29 cents and only tune-up excuse me and only two dollars and ninety one cents went towards interest the rest was a principle payment that paid off my loan slow for me so that is the video I hope this was helpful I hope that I was able to inspire someone I hope that you feel like you can do this too you may not be able to do it in a year but you can definitely do it in a shorter time period than you originally signed on that contract okay it really just depends on how much money you make how quickly even do this but also on top of how much money you make it also depends how focused you are there's people who make like six figures and still have a car loan and it's like you could not cuss out in like no time but because it's so like normal to have a car loan that people are just like it's fine I'll pay it off when I pay it off no like just think about what other things you could be buying with that money like four hundred and thirty dollars every single month for me four hundred and thirty dollars and 19 cents every single month I'm petty you see I'm still I'm still upset about that 19 cents part but anyway just imagine what I could have done with that money for a year's time what's here's my phone hey Google what is four hundred and thirty dollars and 19 cents times 12 the answer is five thousand 162 United States dollars and 28 cents Jesus Christ is more than five thousand dollars like I'm Angela I could have done with five thousand dollars so it's just like oh it's so upsetting but that's why I paid this off like as quickly as I could because it was like I could be using that money for other things thank you guys so much for watching I hope that I was able to inspire someone to pay off their debt quickly I hope you liked the video subscribe to the channel and I'll see you next time bye you [Music]

Channel: life and numbers

Views: 95,668

Rating: 4.884326 out of 5

Keywords: car loan, auto loan, car payments, pay off debt, pay off debt fast, pay off car loan early, should i pay off car loan early, how to pay off debt, how to pay off debt fast, millennials can pay off debt, how to get out of debt super fast, debt free journey dave ramsey, how to get out of debt quickly, how to pay off debt fast with low income, debt free journey 2019, how to pay off debt fast in 2020, how to pay off car loan early, how to pay off your car loan faster

Id: 29g2XbukpSg

Length: 19min 35sec (1175 seconds)

Published: Tue Sep 03 2019