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- 1). Create a budget. Include all income and expenses for the month. Categorize the expenses, such as entertainment, dining out, auto loan, mortgage, insurance, and miscellaneous.
- 2). Analyze the budget and see if any spending can be reduced. Call all service providers, such as cable, cell, and Internet to see if extra services can be removed or if they can beat competitor's pricing to continue your service. Call all credit card companies and ask for a reduced interest rate to save money on interest expenses.
- 3). Earn extra income by working overtime or a second job, or by selling unused items at home through a yard sale or online venue.
- 4). Take any extra money earned or found through your budgeting process and apply it towards your car payment. Lump sum payments can be made throughout the life of the loan. Budget a higher monthly payment for your car and pay the higher payment to reduce the term of the loan.
- 5). Set up a bi-weekly payment plan with your lender, if the option is available. You will make a 1/2 monthly car payment every other week, as opposed to a full car payment once a month. This is the equivalent of 13 monthly payments in one year and allows you to pay down the debt quickly, and at a set level. This is a good option for borrowers who get paid every two weeks, as opposed to once a month.
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