Auto Loan Early Payoff Calculator

Why Pay Off Your Auto Loan Early?

Paying more than your minimum monthly auto loan payment can provide several benefits:

• Save Money on Interest: This is the biggest advantage. Every extra dollar paid towards your principal reduces the balance upon which future interest is calculated. Over time, this can add up to significant savings.
• Own Your Car Sooner: Paying off the loan faster means you'll own your vehicle outright much earlier than originally planned.
• Improve Cash Flow: Once the loan is paid off, you free up that monthly payment amount for other goals, like saving, investing, or paying down other debts.
• Reduce Debt Burden: Eliminating a loan payment can reduce financial stress and improve your overall debt-to-income ratio.

How Do Extra Payments Work?

When you make a payment larger than your required minimum, the extra amount should ideally be applied directly to the **principal** balance of your loan. This reduces the loan balance faster than scheduled.

Important Note: Always confirm with your lender how extra payments are handled. Ensure they are applied to the principal and not just held to cover future payments (which wouldn't save you interest). You might need to specify "apply to principal" when making extra payments.

Also, check if your loan has any **prepayment penalties**. While less common for auto loans than mortgages, it's always good to verify.

How to Use This Calculator

1. Enter your Current Loan Balance.
2. Input the Annual Interest Rate on your loan.
3. Enter the Remaining Loan Term in Months (how many payments you have left according to your original schedule).
4. Enter the Extra Monthly Payment amount you plan to add to your regular payment each month. If you only plan a one-time extra payment, you can calculate its effect, but this tool focuses on recurring extra payments. Enter 0 if you just want to see the original schedule details.
5. Click "Calculate Payoff".
6. The results will show your estimated original monthly payment, the new payoff time, time saved, total interest paid with the extra payments, total interest saved, and estimated payoff dates.

Disclaimer: This calculator provides estimates based on the information you enter and assumes extra payments are applied directly to principal each month. It does not account for fees, insurance, irregular payments, or specific lender policies. Results and dates are illustrative. Consult your lender and loan documents for precise figures and payoff information.