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Will my car payment go down if I pay extra?

Have some extra cash and wondering 'will my car payment go down if I pay extra?'

Nicholas Hinrichsen - Published: September 10, 2020

You can always make a higher payment and reduce your loan balance. However, if you make an extra payment, your car payment will not go down. The auto loan company instead reduces your loan balance and shortens the term of your loan.

Wondering why? The auto loan company doesn't keep loans on their own balance sheet. Instead, they sell portfolios of loans to big institutional investors. The auto loan company basically sells your future payments and that's why you can't reduce your monthly payments this way.

If you want to lower your monthly payment, you want to look into refinancing your auto loan. It's free of charge, you will improve your rate, you will lower your monthly payment and you will save thousands of dollars. We recommend you take a look at our auto loan refinance calculator to calculate how much you could save.

Haven't explored refinancing yet?
WithClutch.com is a fully digital platform that lets car owners like you do so from the comfort of their own home. No need to set a foot in a bank or credit union. You can lower your rate or get cash in as little as 20 seconds.

Follow three simple steps to refinance your auto loan, get approved in seconds and save thousands in minutes.

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