Car loan early payoff calculator
This car loan early payoff calculator shows the months and interest you save by adding money to each payment or paying the loan off early.
Amortization schedule
| Year | Principal | Interest | Extra | Balance |
|---|---|---|---|---|
| 1 | $4,262.99 | $1,637.41 | $1,800.00 | $15,937.01 |
| 2 | $4,798.92 | $1,101.48 | $1,800.00 | $9,338.09 |
| 3 | $5,382.19 | $518.21 | $1,800.00 | $2,155.90 |
| 4 | $1,705.90 | $34.33 | $450.00 | $0.00 |
Before you pay a car loan off early
Check two things in your contract: whether extra money is applied to principal and whether there is a prepayment penalty. Most simple-interest car loans have neither, but some lenders apply extra money to the next month’s payment instead, which does not save interest unless you specify principal.
If your loan carries a rate above what your savings would earn, paying it down is a guaranteed return equal to the loan rate. Keep an emergency fund first.
Payoff quote vs your balance
Your payoff amount can differ from the balance on your statement because interest accrues daily. Ask the lender for a payoff quote good through a specific date, and pay that exact amount. Then confirm the lien release and title transfer.
How much extra helps
On $22,000 at 8.5% over 54 months, an extra $150 a month saves $1,261 in interest and finishes the loan 14 months early.
| Extra / month | Months saved | Interest saved |
|---|---|---|
| $0 | 0 | $0 |
| $50 | 5 | $518 |
| $100 | 10 | $928 |
| $200 | 17 | $1,536 |
| $400 | 26 | $2,285 |
Frequently asked questions
Does paying off a car loan early hurt my credit?
It can cause a small temporary dip because an open account closes, but the savings in interest usually outweigh it.
Should I pay extra on my car loan or invest?
If the loan rate is high, paying it down is a risk-free return at that rate. At a very low rate, investing may earn more, but with risk.
Do extra payments always reduce the loan term?
If your lender applies them to principal, yes. Some lenders treat extra money as an early payment of the next installment instead, so tell them to apply it to principal.
Is there a prepayment penalty?
Most auto loans and mortgages today have none, but some do, so check your loan agreement.
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Estimates from standard loan formulas, not a loan offer or financial advice. Example rates are assumptions: use your own quote.