Nowadays, a car is no longer a luxury but a necessity. But the biggest tension that begins as soon as you buy a car is the monthly EMI payment. Even a modest car costing 8-10 lakhs puts a heavy burden on your pocket for years. Initially, managing the EMI is manageable, but over time, it starts to become a burden. If you also want to get rid of your car loan EMI quickly, these smart methods will be very useful for you.

Reduce the loan burden by making prepayments.
If you want quick relief from EMIs, making periodic prepayments on your car loan is the best way. Whenever you receive a tax refund, bonus, or extra income, use that amount to reduce the principal amount of your car loan. This not only reduces the loan tenure but also saves a significant amount on the total interest.

Make faster payments by increasing your EMI
If your income is gradually increasing, you should definitely consider the option of increasing your EMI. Paying a slightly higher EMI helps in paying off the loan faster and reduces the interest burden. This method is especially effective for salaried individuals.

Make a partial payment once a year.
You can also make a partial payment of up to 20-25 percent of your car loan once a year. This reduces the principal amount of the loan, and the bank gives you two options – either reduce the EMI or shorten the tenure. In both cases, you benefit.

Get cheaper EMIs through loan refinancing.
If interest rates in the market have fallen, it is wise to refinance your car loan. In refinancing, you take out a new loan at a lower interest rate and close the old loan. This reduces the EMI, and if needed, the tenure can also be shortened.

Close the loan completely by paying a lump sum.
If your financial condition has improved and you have sufficient funds, closing the loan completely before time is also a great option. This saves on interest payments in the coming years and eliminates the stress of EMIs.

Disclaimer: This content has been sourced and edited from Zee Business. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.