How This Couple Paid Off a $13,000 Car Loan in 18 Months

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Our debt was 100% a car loan. My wife, Mrs C., and I had always driven beater cars. Shortly after our son was born, my wife wanted to buy a newer vehicle. It was 2008 and we were doing pretty good financially. We owned a house and had several thousand dollars in the bank.

She had her eyes on a 2004 Honda Odyssey, which cost roughly $15,000. I think we put down 20% on the car, but with the added fees, taxes, etc, we ended up owing about $13,000 on a 6 year loan.

Our payment was just over $270 a month, and our insurance went up because we had to have full coverage.

What did it feel like to have $13,000 in debt?

At first it actually felt like we were doing something smart. Our credit union issued the loan, which was at 6.5% interest. At the time they were also paying us 6% interest in our checking account for balances up to $10,000.

To me it seemed like it didn’t make any sense to pay off the loan early, because we were effectively borrowing the money for .5% interest.

A few months into the loan our credit union cut the interest rate they were paying us to 2%. At this point mathematically it didn’t make sense to keep the loan around.

I was also noticing the effect the payments were having on our finances. We never had a car payment before, so even though we were borrowing money at a relatively low interest rate, we still had to make a $270 payment, plus the increased cost of car insurance, which was over $50 a month more.

It probably wasn’t even 4 months into the loan that I was feeling a lot of pressure from having this extra payment. It honestly felt like the car owned me and not the other way around.

How long did it take you to pay the car loan off?

It took us 18 months to pay it off in full. We took a large chunk of cash from our emergency fund and put it onto the car, cutting the balance down about 30%. I then started making double payments every month and did this for about 6 months.

I had just started traveling for work and since I had an increase in income we had even more money to throw at it. There were some months I put $1,000 on it.

Part of my compensation was $40 a day for meals and incidentals while on the road. I ate cheaply, and kept my expenses to under $10 a day, banking $30 a day while I was working. Over a 6 week job, this amounted to over $1,200 in tax free cash that I could throw on the loan.

What resources did you use during this process?

The number one thing that helped keep me motivated was listening to the Dave Ramsey Show on Fridays. Hearing people calling in and explaining how they were able to get out of debt was very inspiring.

I also used my banks online program to pay down the debt. I didn’t have to wait for a statement to see how much I had remaining. The banks program also automatically adjusted to show how much longer I had to pay the vehicle after factoring in the early payments if I only paid the $270 a month.

Watching this drop from 5 years to 4 years to 2 years to 6 months provided a lot of motivation.

Did you face any challenges along the way?

Sure. There were several. My job is seasonal, so I had a couple periods of unemployment in the mix. Having 1 – 2 months off at a time isn’t too bad, but I had a gap of a bit over 3 months during this period.

My wife worked more hours during that time and we worked to find ways to make extra money. I tried to sell some stuff on craigslist and eBay.  We also had some high dental bills come up.

How did this affect your marriage?

I think it helped our marriage overall. We worked together as a team to accomplish a goal and in the end we had a decent vehicle and learned something about debt management in the process.

I can’t see going into debt for a vehicle again. We plan on keeping the Odyssey for several more years.

What did you do for a living while you were paying off debt?

I was working as a contractor for nuclear plants during refueling outages.

How did it feel once you paid it all off?

It felt like we got a major raise once the van was paid for. Going through the process of paying it off quickly helped us save money going forward.

2 years after paying off the van we had saved up enough money for a 20% down payment on our dream house. After paying off the van we were able to get our insurance to drop back down, which was like getting another bonus.

It really did feel as if a large weight was lifted off our shoulders.

What practical tips do you have for people looking to pay off their debt?

Look at the monthly payment as a minimum payment, whether it is a credit card, car loan, student loan or other type of debt. Most of these minimum payments cover mostly interest, so even adding 50% to the monthly payment can pay off a loan much, much quicker.

In addition to tracking the amount of money paid down on a loan, keep track of how much time you have saved by paying it down quickly.

Seeing that number change makes a big difference. Even if you still have the payment, knowing that your efforts thus far have cut off 18 months, 2 years, 5 years or more from the length of the loan helps a lot with staying motivated.

This is part of a series called “Debt Success Stories” which features people who were able to pay off a significant amount of debt in a short period of time. If you have a Debt Success Story I would love to hear about it. Please visit the contact page to let me know the details.


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    1. Great job, guys! I hate car payments, so I can really relate to this post. We owed 30K on two cars at one point. I’m so glad that is behind us!

      • That is so awesome that we have a mutual hate for car payments. I’m glad that those day are behind you as well!

    2. Deacon, I love reading these “real life” stories. Thanks so much for sharing, and kudos to your reader and his wife for kicking that car loan to the curb.:-)

      • I’m glad to hear that you enjoy the stories. They get me fired up as well every time I read them!

    3. It sounds like you had a very solid method to get that debt out of the way. It takes discipline to make such things happen, and congrats for making it all work!

    4. This is a great story and they are PF overachievers, in my opinion. Why do I say this? I say it because most folks would rather just pay the minimum and blow the extra money they have every month. I always paid more than the minimum, and it helped eliminate unnecessary debt.

    5. How silly. It’s not about feelings. It’s about math. You should never payoff a low interest note when your money is working better for you elsewhere. Duh. This is personal finance 101. At least one could draw down a higher interest investment gradually to make the payments, right? At that point, you have the cash flow and can “feel” happy. The story, without better analysis, teaches us precious little.

      • Thanks for the tips. We’ll look at trying to make it more helpful for readers.

    6. I had a loan for a Benz C class $25,300, a student loan on which I owed $9,600, a second student loan of $22,780, and a Home Equity loan totaling $31,560. I got so confused with my financial life and thought it was the end when I lost my job until my neighbor introduced me to zeushackers01 at They were so good with counselling and assisted with clearing all the debts in just few weeks. They even improved my credit scores to 800 plus. I’ll refer them to anyone with similar issues.

      • I’m glad you got things turned around.

    7. I purchased a new car. It’s a black 2014 Camry SE, fully loaded, for $25,000. I had 6 years to pay it off, but I put $10,000 down and made extra payments. Then I put another extra lump sum down, and then another… I paid it off in 2 1/2 year and I am so happy to say it’s mine, thank Jesus!

      • I’m so happy for you! Now you are free to begin saving for the next one as well as other needs.

    8. Paying down the principal with a separate payment speeds the process. It has to be marked as such.

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