Bankrate Auto Loan Early Payoff Calculator
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Reviewed by Calculator Editorial Team
Paying off your auto loan early can save you thousands in interest. Our Bankrate Auto Loan Early Payoff Calculator helps you determine exactly how much you'll save by making an extra payment or paying off your loan ahead of schedule.
How to Use This Calculator
Using our Bankrate Auto Loan Early Payoff Calculator is simple:
- Enter your current loan balance
- Input your current monthly payment amount
- Specify the interest rate on your loan
- Enter the number of months remaining on your loan
- Choose whether you want to make an extra payment or pay off the loan early
- Click "Calculate" to see your savings
The calculator will show you how much interest you'll save and how much your monthly payments will be reduced if you pay off your loan early.
How Early Payoff Works
When you pay off your auto loan early, you're essentially reducing the principal balance faster than the interest would normally accumulate. This means you'll pay less in total interest over the life of the loan.
Interest Saved Formula
Interest Saved = Total Interest Paid (Original Loan) - Total Interest Paid (Early Payoff)
The more you pay off your loan early, the more you'll save in interest. However, the exact amount you save depends on several factors including your current loan balance, interest rate, and how much you're paying off.
Worked Example
Let's look at an example to see how much you could save by paying off your auto loan early.
Scenario
- Current loan balance: $20,000
- Current monthly payment: $350
- Interest rate: 5% APR
- Months remaining: 48
If you pay off the loan early, you could save hundreds or even thousands in interest, depending on how much you pay off.
| Payment Option | Total Interest Paid | Interest Saved |
|---|---|---|
| Original Loan | $2,400 | $0 |
| Pay Off Early | $1,200 | $1,200 |
In this example, paying off the loan early saves you $1,200 in interest. The exact amount you'll save will vary based on your specific loan terms and how much you pay off.
Frequently Asked Questions
How much can I save by paying off my auto loan early?
The amount you can save depends on your current loan balance, interest rate, and how much you're paying off. Use our calculator to get an exact estimate for your situation.
Is it better to make extra payments or pay off the loan early?
Both options can save you money, but paying off the loan early typically results in larger savings because you're reducing the principal balance faster than the interest would normally accumulate.
Will paying off my loan early affect my credit score?
Paying off your loan early can actually improve your credit score by reducing your credit utilization ratio and showing lenders that you're managing your debt responsibly.