Auto Loan Payoff Calculator

Paying off your auto loan early not only removes a big expense from your monthly budget but can also save significant amounts of cash on the interest portion of your loan. Using an auto loan payment calculator can help you see exactly how much you can save and how quickly you can pay off your auto loan, simply by inputting different payment and interest amounts. Even small changes to your payment schedule or the amount you pay can have dramatic effects on the timeline for paying off your car loan.


Information and interactive calculators are made available to you as self-help tools for your independent use and are not intended to provide investment advice. We cannot and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.

Paying off your auto loan early can save you on interest

For most people, buying a car means taking out a loan to pay for it. While this allows you to get behind the wheel right away, your auto loan comes at a price because you’ll be charged interest on the money you borrow. In other words, if you borrow $15,000 to buy a car, you will be paying back more than $15,000 because you’ll have interest calculated into the equation. 

Your auto loan interest rate is calculated as a percentage of the loan amount and is based on your credit score, creditworthiness, loan terms, the type of loan and the lender you choose to work with, among other factors. You may be able to renegotiate these rates at a later date, which is known as auto loan refinancing.

Paying off your auto loan early comes with benefits, including the fact that you’ll save on interest costs. The sooner your loan is paid off, the less money you’ll pay in interest, which can amount thousands of dollars over the life of a standard auto loan.

Plus, by not having a car payment, you’ll free up several hundred dollars every month in your budget, and you’ll own your car. Auto loans are secured loans, which means that you risk losing the car if you stop paying. Once your car is paid off, though, it is 100% yours, and the lender can’t take it away.

How to pay off your auto loan early

Extra or larger payments

A car loan payment calculator shows you exactly what happens if you pay more each time you make a car payment, or what will happen if you make extra payments. By paying even a small amount over what you owe, you can shorten the life of your loan significantly and save a lot of money in interest charges. The report function shows your auto loan amortization schedule, which breaks down the portion of your payments going towards the principal and interest. You can see the full breakdown throughout the entire life of the loan.

Lump-sum payment

The best way to save on your car loan is to pay the entire loan off as soon as possible. If you’ve come into some extra cash, putting it toward your car can save you on future interest charges. Most car loans don’t have a prepayment penalty, which means that you can pay the loan off early without being assessed extra charges for doing so. 

The final word

One of the best ways to save money on interest and free up more room in your budget is by paying down your debts quickly and aggressively. Most car loans don’t have prepayment penalties, which means you can pay them down without being charged extra fees, and you often can save a ton of money on interest, too. Plus, owning your car outright helps to protect your asset, so once you pay off your vehicle loan, it is all yours.

If you want to pay off your car loan early, using an auto loan calculator will help you determine how to start implementing that plan. You can input your exact loan terms to find the best course of action. If you’re looking at taking more control of your finances by tackling your auto loan debt, the calculator can help.

Jason Lee

Jason Lee is a U.S.-based freelance writer with a passion for writing about dating, banking, tech, personal growth, food and personal finance. As a business owner, relationship strategist, and officer in the U.S. military, Jason enjoys sharing his unique knowledge base and skillsets with the rest of the world.