A few years ago, I was stuck in one of the worst financial positions imaginable.
– Credit score: 514 (thanks to some old medical bills and a few missed payments during a rough patch)
– Just got approved for a used 2021 Toyota Camry — but because of my low score, the dealer hit me with an 11.2% interest rate on a $32,000 loan over 72 months
– Monthly payment: $578
– Total interest I was scheduled to pay: $9,648 — almost $10,000 just for the privilege of borrowing money
I felt trapped. I knew I had to do something, so I attacked the problem from two angles at once:
1. Pay the car loan off as fast as humanly possible
2. Fix my terrible credit so I’d never get stuck with double-digit interest again
Here’s exactly how I did both — and how I ended up saving $4,200+ in interest while jumping my score over 200 points.
Step 1: The “Principal-Only” Payment Trick That Saved Me Thousands
Most people just log in and click “Make a Payment.” That’s the mistake.
When you send extra money without specifying where it goes, the lender treats it as an advance on future monthly payments — NOT as a reduction of the principal. That means you keep paying the same high interest on the original balance.
Instead, I always selected “Principal-Only Payment” (or called the lender to make sure the extra went straight to principal).
Real numbers from my loan:
– Original term: 72 months → final payment August 2030
– Total interest if I did nothing special: $9,648
What actually happened when I started adding extra to principal:
– I scraped together an extra $300–$600 most months (side hustle + cutting subscriptions)
– After 14 months of aggressive principal payments, I refinanced at 4.9% with my new 700+ score
– New total interest paid: $5,412
→ Total interest saved: $4,236
→ Paid the car off 31 months early
Step 2: How I Rebuilt My Credit While Attacking the Car Loan
Here’s the part most people miss: While I was throwing every extra dollar at the car, I was also quietly building new positive credit history on the side.
I started using Kikoff in early 2024 — honestly, I only signed up because it was $5/month and didn’t require a credit check. I figured I had nothing to lose.
What Kikoff did for me:
– Gave me a $750 revolving line of credit that reports to all three bureaus
– I set it on autopay → 100% on-time payment history every single month
– After 3 months, my score jumped 63 points just from having a new tradeline
– At month 8, I got invited to their secured credit card (works like a debit card but reports as real credit card activity)
– By month 12, I had two strong revolving accounts reporting perfectly
Result? When I went to refinance the car in month 14, my score had climbed from 514 → 712. That single refinance (11.2% → 4.9%) saved me an extra $2,800 in interest on its own.
If you’re in the same spot I was — low score, high-interest loans — I genuinely recommend trying Kikoff. It’s the lowest-effort credit builder I’ve ever used. You can get started here: Kikoff.com (full disclosure: that’s my affiliate link, but I only share it because it actually worked for me).
The 5 Other Strategies I Used to Pay the Car Off Even Faster
1. Switched to bi-weekly payments → snuck in one extra full payment per year without noticing
2. Rounded up every payment to the nearest $50 (and made sure the extra went to principal)
3. Canceled the $1,800 extended warranty I got talked into → got a $1,200 pro-rated refund and threw it straight at the loan
4. Used every tax refund and work bonus as lump-sum principal payments
5. Tracked spending for 60 days → found $380/month I was wasting (goodbye DoorDash) and redirected it to the loan
Final Numbers After 38 Months
– Car: Paid off in June 2027 (instead of August 2030)
– Total interest paid: $5,412
– Credit score: 738
– Money saved: $4,236 in interest + thousands more in future borrowing power
If you’re paying more than 6–7% on a car loan right now, you’re literally burning money every single month. Start throwing every extra dollar at the principal, and if your credit is holding you back from refinancing — fix that first.
Kikoff was the turning point for me. It’s not flashy, but it works.
Start building your credit today (no credit check, starts at $5/month):
→ Kikoff.com
Your future self (and your wallet) will thank you.
