Article: Some lenders may only charge you a fixed monthly interest, which can allow you to apply additional payments toward the principal amount. However, other lenders may charge you interest on every payment you make. Ask your lender if you can make additional payments toward the principal amount of the loan without having to pay interest. If so, you can plan to make small, additional payments toward the loan each month and pay less in interest over the life of the loan.  An example of the difference between the kinds of interest you pay is: if you have a $100 payment due every month with $4 interest that means you pay $104 per month. What you need to find out is if that $4 is a fixed amount per month, which would mean no matter how much you might pay on the principal ($100, $200, $300) you still pay just $4 monthly interest. If, however, they charge interest on every payment, you would end up paying 4% interest on whatever you are putting down on the principal -- $8 if you chose to pay $200 instead of $100, for example. Even if you have to pay interest on each payment, it is usually worth your while to make extra principal payments to pay your loan off faster. Use a check or pay online to make an extra payment per month, that is separate from your regular car loan payment. Write “Principal Only” on the check so that the lender will not count it toward your loan payment for the next month. If you are paying online, pay the extra principal amount before you are billed for the next month. Instead of making one monthly payment, split it in half and make payments every two weeks. This typically works out to twice per month, but by the end of the year you will have made two more biweekly payments (one full payment) because most months are longer than an exact 4 weeks. In other words, make 26 half-payments per year (every other week for 52 weeks) that will equal 13 full payments, rather than the 12 you would've otherwise paid. This means that the total amount you owe will go down faster, saving you interest on the loan.

What is a summary?
Determine if you can make additional payments to the principal balance only. Make a separate payment for principal. Make biweekly payments.