How to Reduce Loan Costs Without Refinancing

Interest on car loans is typically calculated on a reducing balance. This is your weapon. If you pay even Ksh 5,000 above your required monthly installment, that money goes directly to reducing the principal amount.

By attacking the principal, you reduce the interest charged in the following months. Doing this consistently can shave 6 to 12 months off your loan tenure, saving you tens of thousands of shillings. Check with your lender if they allow penalty-free overpayments. Be the boss of your loan, don't let it be the boss of you.