How this calculator works
Uses the balance and payment on your auto loan statement. It shows when the car is paid off at your current payment, how much sooner an extra monthly amount or a lump sum gets you there, the interest that saves, and the daily (per diem) interest a lender adds to a payoff quote. Auto loans are simple-interest loans, so interest is figured on the balance left.
- Each month: interest = balance × APR ÷ 12, then payment + extra comes off the balance. Repeat until it reaches zero.
- Interest saved = interest left at your payment − interest left with the extra.
- Daily interest (per diem) = balance × APR ÷ 365. Payoff amount ≈ balance + per diem × days until the payment arrives.
Worked example
With these inputs: current loan balance $18,000; interest rate 7.5%; monthly payment $450; extra each month $100; one-time extra payment now $0.
The result is paid off sooner by 10 months, with interest saved $576.71 and payoff time at your payment 3 years 11 months. The payoff amount is an estimate: interest accrues daily, so ask the lender for a 10-day payoff quote before sending a final payment. Mark any extra as principal-only.
How to pay off a car loan early
Most auto loans are simple-interest loans: interest is charged on the balance that's left, so every extra dollar you pay lowers next month's interest. The table under the result shows the payoff time for $50, $100, $200, $300 and $500 extra a month; in the example, $200 a month cuts the loan to 2 years 7 months and saves $951.23.
A lump sum works too. A one-time $2,000 payment on the example loan, with no monthly extra, pays it off in 3 years 5 months and saves $626.53. Tax refunds and bonuses are good candidates.
Two checks before you pay extra: tell the lender to apply it to principal (not to the next payment), and read the contract for a prepayment penalty. Most auto loans don't have one, but some do.
Your car loan payoff amount
The balance on your statement isn't what it takes to close the loan, because interest keeps accruing every day until the payment arrives. Lenders quote a 10-day payoff amount for that reason. The calculator estimates it from the daily interest: $3.70 a day on the example, so $18,036.99 if the payment lands in 10 days. Use the lender's own quote for the final payment.
Selling or trading in the car? The payoff amount is what the dealer or buyer has to send the lender before the title is released.
Pay off the car or save the money?
Compare the loan's APR with what the money would earn and with your other debts. A credit card at 24% is a better target than a car loan at 7.5%; the debt snowball and avalanche calculator ranks them, and the invest or pay off debt calculator weighs the trade-off. Keep an emergency fund first, since a paid-off car can't pay a surprise bill.
Shopping for the next car? The how much car can I afford calculator and the cost of owning a car calculator show the full monthly cost, not just the payment. For any other installment loan, use the extra payment calculator.
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Frequently asked questions
How do I calculate my car loan payoff?
Run the balance forward month by month: add a month of interest (balance × APR ÷ 12) and subtract the payment until it reaches zero. An $18,000 balance at 7.5% with a $450 payment takes 3 years 11 months and $2,777.97 of interest.
How much does paying an extra $100 a month on a car loan save?
On an $18,000 balance at 7.5% with a $450 payment, an extra $100 a month pays the loan off 10 months sooner and saves $576.71 in interest. Enter your own balance and APR for your loan.
Is it smart to pay off a car loan early?
Usually, if the loan has no prepayment penalty, you have an emergency fund, and you don't carry higher-rate debt like a credit card. Every extra dollar saves interest at the loan's APR.
What is a 10-day payoff amount?
The balance plus the interest that accrues until your payment arrives. At 7.5% APR an $18,000 balance accrues about $3.70 a day, so a 10-day payoff is about $18,036.99. Ask the lender for the exact figure.
Do extra car payments go to principal?
Not always. Some lenders apply extra money to the next payment instead. Mark the extra as principal-only, or ask the lender how to do it, so it cuts the balance right away.