# How To Pay Off Your Car Fast | Velocity Banking

Denzel, show me how to pay
off my car in half the time, and I’ll trust you. I’ll go into battle with you. I’ll go to war with you. If you show me how to do
that, listen, man, I’ll do this velocity banking thing. I’ll stay with it. I’ll stay the course. All right. So look, we have an example here
of a gentleman, 48 years old. He’s a teacher. Spanish teacher. Awesome. I love it. I love teachers. I want to be a teacher one day. I am a teacher right
now, but I want to be able to be in
a classroom setting. But unfortunately,
this stuff does not get taught in school,
which is unfortunate. There’s no degree for this. There’s no certification. You’ve got to have licenses
and stuff to be able to teach. That’s why I’m using this
platform right here to reach you, to teach you, to help you. Look, let’s dive into this. Income. \$3,600. Expenses. \$3,353. We have a debt. \$200 grand. Oh, yeah. And our cash flow. \$330– between \$330
and \$380, give or take. So the first debt in this
scenario, these two debts, are composed of a
car and a mortgage. I want to tackle the car
first, because that’s what they told me. I want to pay off the car. Let’s go. So that’s how much they owe
currently, September 2018. \$14,700. Interest rate 2.9%. That’s nice. I like that. That’s how many years left– 4 years. And that’s the
monthly payment, \$393. OK. So now, we’re in the process
of getting our debt weapon. We don’t have it yet. But we’re in the process of
getting our debt weapon, which is the unsecured line of
credit for about \$10,000, 12%. Now, our chunk payment
is going to be anywhere from \$3,960 to \$4,560,
which is our cash flow times 12 in a year. Get that number. Going to make a withdrawal
from the line of credit, chunk at the car. As soon as I do that, I cut off. I want to say, 15
months, 15 months or so. Shaved. That’s a year and
to hit my goal, which is, show me how to pay off
the car in half the time. Now, check this out. We just created a debt
of this amount over here. That we’re going to
pay 12% interest on. Who pays more? 2.9 or 12? It’s a trick question. In reality, this 2.9 pays more. This is an amortized. This 12%– divide that by
30, you get less than 2.9%. Because this interest
is calculated simple. So I will pay less. As a matter of fact,
I will pay nothing, because I offset interest. Offset it. By making a chunk here, I
save thousands of interest for the year, which gives me
a cushion for the interest that I’ll pay over here. Therefore, it offsets. It’s as if I didn’t pay
any interest to begin with. So look, what do we have to do
to continue to offset interest? We have to dump our
entire income back into the line of credit. You do that for the
next 11, 12 months. And you’re continuing
to pay the \$393. Guess what? The interest rate is
going to be even less. So more of the \$393 is going
to be going towards this debt. And when you do the
math conservatively– conservative, my friend–
between 1 year and 1.5 years, this \$14 grand, done. \$14,700, done. Now, let’s say all he did
from now to 12 months, he gets \$1 raise. \$1. Can you get a \$1 raise? In a year or less. Can you do that? What about a bonus? Can you get a bonus at
the end of the year? Is that possible? Is it possible to maybe
cut back on some expenses? Maybe go out one
time less per week and save \$50, which is \$200,
which is \$2,400 in a year? Can he do that? I think he can. If all he did was get
\$1 raise, that 1.5– the 1.5 represents
\$330 of cash flow. The 1 year represents the \$380,
which is actually 1.2 years– so one year and
then two months– to pay it off. But if he were to
get that raise, it would be like one
year right on the head. Month 12, towards
the end of month 12 going into the 13th month. Just by getting \$1 raise,
he would shave four months. That’s powerful. So I hit my goal. Show me how to pay off
the car in half the time. Matter of fact, I
went even further, and I did it in a year, which
is a third, pretty much. You do the math. So that’s exciting, man. Now, he’s 49 years old. Or 50, depending on if he turns
49 this year or next year. Let’s say he’s 49. He killed \$14,700. Now we have an increased
cash flow of \$393 per month. That’s a few extra
thousand per year. Add to that. Now we’re going to
tackle the mortgage. But before we do
that, we’re going to increase our line
of credit to \$15k. Because our chunk payment
is going to be \$9,276. Add those two numbers, you’ll
get \$9,276 for the year. And I’ll show him– now, I’m not going to
do it on the board– but I’ll show him how
to pay off the mortgage in seven years or
less, as opposed to 30. So by the time he’s 56, 57– conservative. Mind you, what if he got
\$1 raise the next year? On the timeline of
killing a mortgage, for every \$1 raise you
get, you shave six months off the timeline. He can do that. I know he can do that. So by the time he’s 55,
56, or 57, my friend’s going to be debt free. And he’s going to be focusing
on creating wealth, leaving a legacy behind for
the family, doing the thing that he is great
at, harnessing in on that. And my friends are going
to be singing this song. He’s going to be
singing this song. He’s going to be
doing his dance. You ever been to the
chiropractor before? Once you get off
the table, you’re like, oh, feel loose, right? You feel like dancing? Going for a run? Same thing in your finances. It’s the same
thing I want to do. I want to release that
stress right here, back of your neck
or your lower back. Those pains– lower
back and neck– those pains at that age– it’s not because of age. I promise you. This guy’s in good shape. OK, it’s not because of his age. It’s the finances. There’s a stress point
right here and right here. And that causes
financial stress, which causes pain in the body. So when we release that, boy,
I’m going to be standing tall. Wife’s going to be
like, who’s that guy? Wow. [INAUDIBLE] man. This is powerful. So I know he’s
going to like this. I try to make it fun,
exciting, and really get you pumped up
that not only this is this strategy so good
for your personal finances, but it’s impactful on the
household, relationships. you’re able to see through
a new set of lenses. You’re able to have options. All right, who am I? Why am I here? What’s my purpose in life? Where am I going? Where am I headed? Who would I want to
surround myself with? How do I want to raise my kids? All right. See, when you become
free from the money, wow, now you’re able to
really experience the life that you’ve been given. So I hope you guys enjoyed that. My name’s Denzel. Reach out to me any time. I have a form that you can
fill out in the description. And we can have a
one-on-one together. And put your numbers
on the board. And let’s see what happens. Let’s see what happens. All right. Enjoy the rest of your day. Pleasure.

## 31 thoughts on “How To Pay Off Your Car Fast | Velocity Banking”

Great video, I just have one question. When I subtract 3353 from 3600 I get a cash flow of 247. Is he making extra money or should we add in some room for fluctuations in income?

• Andre Robinson says:

I'm here in CA, where is the best 3-5 Banks or Credit Unions to obtain the Debt Weapons? Current credit is great on all 3 bureaus with good limits on current credit cards minimal balances.

• llciii says:

Denzel I’m new listening to this concept and it has most certainly piqued my interest. Do I continue to make monthly payments once I make that one huge chunk payment or do rinse and repeat once I make those payments to the LOC. Thanks in advance

• DAVID WILLIAMS says:

Denzel I hear you but I’m having difficulty appreciating the notion of dumping all his income into the LOC and thereafter slowly over the next month withdraw his expenses, which leaves him a balance of about \$350.00 will pay off the LOC. How does this balance over 12 or 18 months period returns the LOC to 0. I’m lost there can you please explain? Thx.

• Aves Raggiana says:

Could you explain how the 10% simple interest charge on the LOC does not catch up with you during the period you're paying down the LOC to zero?

• Bryan T Barker says:

DNR baby!!! Teach it brother!

• Bryan T Barker says:

man gotta reply again…sorry….this is ur 3rd video I watched tonight( second time ive watched this one) and now I REALLY want a dollar raise!!

• moises maisonet says:

How about if you can’t get a l.o.c for 10k I only have 1,350 could I still pay velocity banking.

• Marcus Smith says:

Do you help with credit because I have low limit cards 2 x \$500 and 2 x \$300

• R N says:

On his example I would tell this guy to get a second job to get the debt down. Working at Target or Wal-Mart or delivering pizzas a couple times a week would get this going.

The problem with a cash flow of 350 is any extra expenses kills him. If he could add 200 to 300 a month would go a long way

• Gabriel Q says:

Where can I get a line of credit? is that what I ask for a line of credit application?

• TheDavTrac Channel says:

Hey Denzel !Been watching your channel for a minute I like your material you got good information here but anyway got a question I just started this velocity banking I got an approval for 25,000 line of credit I used 15,000 my 34,000 car which took me down to 19,000 and half the interest rate I have \$10,000 sitting in my savings what should I do should I put it in the line of credit or just save my \$10,000 in my savings for a rainy day?

• L OOdy says:

Found your channel just now and I'm now hooked already. 18 years olds by the way

• Fake Work says:

Isn't simple interest divided by 12? So every 30 days you would pay 1% of the remaining balance in interest. So you would need to pay off the LOC in 3 months to break even with just applying your cash flow to the principal on your auto loan.

Denzel, I can't get loc cuz I credit card. Could u help please.

• hayden mattos says:

Hey Denzel, quick question would this work for me if I owe \$4500 on my car loan and the car is worth \$8000. I got the car in 2015 and I pay \$300. My average interest paid per month is around \$20-25ish.

• VGK30 says:

So I will have the car payment to make plus the same size payment on the line of credit ? Basically a double payment no? Sorry for my ignorance

• Leon Flores says:

El maistro longaniza!!

• Joel Villa says:

Good stuff man.

• IMPERIAL D says:

Will it work with credit card instead of line of credit

• Andy Valdez says:

His cash flow is 243 per month, don't see where though get different set of numbers

• Andy Valdez says:

Sorry, doesn't make sense

• Marta Villanueva says:

How many years has this teacher taught to be making \$36,000 a year? And in which state?

• Liz Litaea says:

in your car and mortgage example after chunking, do you still continue to make the monthly payment after a chunk?

Great motivation my guy!

• shenicken snk says:

If I have a car loan without a mortgage can I just double up on my payments (i.e. \$700 every 1st and 15th of the month)?

• IGSpeedVision says:

I don’t agree with the video but I appreciate the content and your time. I’d never take out a personal loan to pay another loan.The real issue here is the teacher is not living with in his/her means. It’s simple they can’t afford the car. The math you provide above the teacher makes about, 45k a year but his car cost about 30k.

• Angel M Cosme Vazquez says:

Denzel I have been watching your videos for about a week. Cant wait to start your tier 3 program "Proud To Pay" Goings to get my numbers together to get this ball rollin. Talk to you soon !!!

• Beautiful Light and Love says:

I was just approved for a heloc and I plan to use this strategy for my car and mortgage. I have watched a few of your videos and I am totally pumped about this. I can see how this works! I'm excited to get started. Thanks Denzel!!

• Chelsea Rush says:

My car’s interest is 18%.. I didn’t have the best credit about two years ago… and It also has negative equity. (About \$6,000) I no longer want this car and would like to get a used car with a lower interest rate. Would it be best to Use a PLOC to buy the car out and purchase a used car and then try to use velocity banking to pay the total down?