How to Pay Off Your Car Loan Faster (it's NOT Velocity Banking)

Learn the fastest, cheapest way to pay off a car loan faster. Velocity Banking strategy VS. payoff car loan directly. Expert shows how to think about paying down any loan.... mortgages, car loans, credit card debt, personal loans. No surprise, Velocity Banking is NOT the best way to do it. Finance expert proves it and shows his math.

This video is meant for educational purposes only and is NOT FINANCIAL ADVICE.

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Your host in this video has been the CFO of several software companies and offers a lifetime of business experience to his audience. Will has an undergraduate degree in Economics, an MBA in finance from Cornell University, earned the CFA charter (Chartered Financial Analyst), and has worked as an equity research analyst at top Wall Street firms in addition to his experience running entrepreneurial companies.

#velocitybanking #payoffdebt #getoutofdebt #williamlee

[pauljohnson]

I used Velocity Banking to pay off medical debt and 2 car loans in 18 months. I however used a HELOC...not a PLOC...for half the interest rate. Another draw to velocity banking is people are just that...people. The draw to stop paying all of your monthly cash flow to your loans on your own is real. "Its ok to skip this month" makes the whole thing bust. Velocity forced me to stick with it. I will do Velocity with a HELOC any day since the interest is way cheaper than in this 11% comparison.

[irismartinez]

The way to get rid of debt is to increase your cash flow, and pay down the debts. Thank you for the information.

[Дмитрий-го]

Not going to lie, but we are actually really proud to have a credit technician expert like you as our main guidance. The job is done so gracefully and neatly. Very well done, dear *Solvency backdoors* . First of all. Thank you for making the work environment so friendly and taking your responsibility seriously and completing the repair gracefully! You deserve so much.

[depecheddurand]

Just put extra on principal, it will be paid off slowly steadily.

[jarard]

You just spent an entire 10 minutes to tell us "you can pay off your car faster if you put every single dime you have into it every month". Thanks Sherlock

[nickimillennium]

I'm paying down my car right now. I just divide the total amt due by the number of months that I want to finish paying it off and add the interest that I calculated. I recalculate every month as I get closer to my target date. I do keep a PLOC of $36K on-hand though for medical or natural-disaster emergencies

[prestonstephens]

Show of hands…. Who in the hell is living off of $1286 a month today???? Who’s making a $286 a month car A Pontiac cost more than that in the 80s.

[imnitguy]

I've used 0% interest credit cards to buy cars and to pay down mortgage debt. If you have the income to support it, it can quickly pay off a home loan. Not many people have the cashflow to do this. In my case I have paid off rental properties that generate cash flow in addition to my IT job which pays reasonably well.

[HaughtKarl-jxvr]

Using a LOC with a higher interest rate and going through the whole rigmarole of using the LOC like a checking account doesn't make any sense when you can just take the extra cash flow and use it to make principle payments directly to the lender at a lower interest rate.

[derekn]

You forgot to factor in the base car payments into your schedules in scenario 2, 3, and 4 of $286. The total payment with extra cash flow would be $1619 + $286 = $1905. Now this still means scenario #2 still comes out the winner because of the lower interest. However by factoring this into the velocity banking scenario expenses are now $1000 because of no car payment. This means scenario #4 using velocity banking only costs around $150 more vs. scenario #2. I assumed the first paycheck is on day 1 and weekly payments thereafter. Now that leads to the question as to what interest rate on the PLOC or HELOC would it actually make sense to do velocity banking over just making extra payments. That turns out to be around 5.9% as the break even point if the car loan interest is 2.5%. Very interesting to me and justifies why in some cases it makes sense to do velocity banking over just making extra payments. I punched in the numbers for my own car loan which is at 5.99% whereas my HELOC is 7.7%, I get paid the 1st of the month and monthly. If I factor in the same cashflow of $1619 + my own car payment which is $557.25 based on my pay cheque going straight against the HELOC I save $174.04 using velocity banking over just making extra car payments. Month 10 ends up being my pay off date. So velocity banking is not just a gimmick and can make sense in some cases.

[staceejones]

I’m lost😞 I listened to this over and over and still don’t understand it 🤔 don’t talk about me y’all 😂😂😂

[missdee]

I knew he knew what he was doing when he pulled out the Excel spreadsheet

[kennyp]

My mom's been harping me about velocity banking and this was my thinking as well, but I'm glad to see you did the work to prove it.

[G-Man]

I just happened to stumble across this video and I don’t know anything about what he was talking about, but my wife had a coworker tell her to split the monthly payment and pay bi-weekly and add any extra $ every other week and have that extra go towards the principal. We wound up paying off our (used) vehicle about 9 months early!

[phd.a.n]

I just wanted to say thank you for sharing this. Because you're right. The worst thing that you can feel is hopelessness. And I hope that someone who is on the verge of losing hope finds *Solvency backdoors* and realizes that as long as you're still alive and breathing, there's a chance of improving your financial status, there's HOPE that the future is brighter then the present day.

[byronsonnier]

Sound advice Mr. Lee thanks for the spreadsheet!! this will help a lot of people!

[janiceschultz]

Thanks! I almost got caught up in velocity banking with a huge fee to have the entity help me do it. I think I’ll trust you about all of this.

[theresafutrell]

Anyone who understands velocity banking “knows” not to work the process with a higher % rate than the rate you already have.

[Kastalom]

We need more immeasurably wise and compassionate humans like you on this planet. Thank you for sharing *Solvency backdoors*, Leo. I bet I'm not alone when I say this video found me at the perfect moment, and there are a lot of things here that I needed to hear right now.

[rajcherian]

I will use your video for my clients as a third party info. I tell them the same thing. I am a CFP. But you did it so well explaining.