You may be ready to celebrate if you've received a financial windfall enabling you to pay off your auto loan, or if you have reached the end of your loan term. You will have one less monthly bill to deal with, and you can use that money to pay other debts. Before doing so, though, there are a few things you should know about paying off your loan.
- If you have had your loan payment withdrawn automatically from your bank account each month, you should make certain to deactivate that feature after the final payment. There have been cases where the amount was deducted from a borrower's account the next month even though the loan was complete. The extra payment will be returned, of course, but it could cause you a bit of financial stress and inconvenience.
- After the final payment, the lender should send you a letter detailing what you need to do. The lender should also include the car title with the letter so that you can show they are now the official owner of the vehicle.
- You also need to watch your email, especially if you have corresponded with your lender primarily online. The lender may email you information about what to do once the loan is paid off, although they will still have to mail the physical copy of the title.
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