Extra Loan Payment Calculator Auto
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Reviewed by Calculator Editorial Team
Paying extra on your auto loan can save you thousands in interest and shorten your loan term. 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 of your extra payment. The calculator will show you:
- How much interest you'll save
- How many months you'll pay off early
- A breakdown of your savings over time
Use this information to decide if making extra payments makes financial sense for your situation.
How Extra Payments Work
When you make an extra payment on your auto loan, you're essentially paying down the principal balance faster. This reduces the total interest you'll pay over the life of the loan.
Formula Used
The calculator uses the amortization formula to determine how extra payments affect your loan:
Monthly Payment = P * (r(1+r)^n) / ((1+r)^n - 1)
Where:
- P = Principal loan amount
- r = Monthly interest rate
- n = Number of payments
The calculator then compares the original loan schedule with the modified schedule that includes your extra payments to determine the savings.
Worked Example
Let's say you have a $20,000 auto loan at 5% APR (0.4167% monthly) for 60 months. If you make an extra $200 payment each month:
| Scenario | Total Interest | Payoff Time |
|---|---|---|
| Original Loan | $3,167 | 5 years |
| With Extra Payments | $1,567 | 4 years 2 months |
In this example, you save $1,600 in interest and pay off the loan 10 months early by making just $200 extra payments each month.
Frequently Asked Questions
Can I make extra payments on any type of auto loan?
Most auto loans allow extra payments, but some may have restrictions. Always check your loan agreement before making extra payments.
Will making extra payments hurt my credit score?
No, making extra payments on time will actually help your credit score by reducing your credit utilization ratio.
How often can I make extra payments?
You can typically make extra payments at any time, though some lenders may prefer them to be made at regular intervals.
What if I can't make my regular payment?
If you can't make your regular payment, contact your lender immediately to discuss options that won't negatively impact your credit.