Auto Loan Calculator Paying Extra
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Reviewed by Calculator Editorial Team
Paying extra on your auto loan can significantly reduce your interest costs and pay off your loan faster. This calculator helps you determine exactly how much you'll save by making additional payments.
How to Use This Calculator
Enter your current loan details and the amount you plan to pay extra each month. The calculator will show you:
- Your original monthly payment
- Your new monthly payment with extra payments
- Total interest saved
- How much faster you'll pay off your loan
Use this information to decide if paying extra is right for your financial situation.
How Paying Extra Works
When you pay extra on your auto loan, you're essentially making a larger principal payment each month. This reduces the principal balance faster, which means you'll pay less in interest over the life of the loan.
The calculator uses the following formula to determine your savings:
Where the new monthly payment is calculated as:
Note: The calculator assumes you make the extra payment every month. If you make irregular extra payments, the results may vary.
Example Calculation
Let's say you have a $20,000 auto loan with a 5% annual interest rate and a 5-year term. Your original monthly payment would be approximately $389.13.
If you decide to pay an extra $100 each month, your new monthly payment would be $489.13. Over the life of the loan, you would save approximately $1,157.50 in interest.
You would also pay off your loan about 1 year and 2 months earlier than the original 5-year term.
Frequently Asked Questions
Is it better to pay extra principal or make extra payments?
Paying extra principal typically saves you more money in interest over time because you're reducing the principal balance faster. However, if you need the money for other expenses, making extra payments may be more practical.
Can I pay extra on my auto loan?
Yes, most auto loans allow you to make extra payments. Check with your lender to confirm their policies and any fees that may apply.
Will paying extra hurt my credit score?
No, making extra payments on time will actually help improve your credit score by reducing your credit utilization ratio and showing responsible debt management.