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Should I pay off my car loan early?
Extra car payments save the interest the balance would have carried, which makes prepaying a guaranteed return equal to the loan's rate. See how much sooner it ends, what it saves, and whether the same money would do more invested or paying off a costlier debt.
Your loan
The payoff amount from your lender is the exact figure.
Most simple-interest car loans have none; your contract says.
Paying it down faster
A savings rate or expected investment return, or the rate on a costlier debt the same money could pay down.
Enter the balance, APR and remaining months or payment.
Before you prepay
Check how your loan charges interest. Most car loans use simple interest, charged on the balance you still owe, which is what this page assumes. Some use precomputed interest, where the total is set at the start and paying early saves less; the CFPB says that if you plan to pay off early, you want a simple interest loan. Your Truth in Lending disclosure tells you which: a simple-interest loan must say whether a charge may be imposed for paying early, and a precomputed one whether you are entitled to a rebate of the finance charge. Under federal law a precomputed loan must refund unearned interest when paid off, and the Rule of 78s, which front-loads interest, is barred for precomputed loans longer than 61 months made after September 1993; shorter ones and state law can differ. Your contract and state law decide whether a prepayment penalty applies.
Make sure extra goes to principal. Payments usually cover fees and interest first. Ask your lender or servicer to apply the extra to principal, and check the next statement to confirm the balance fell by the full amount.
Keep an emergency fund first. Money paid into a car loan cannot be taken back out if the car breaks down or your income stops. The emergency fund calculator sizes the cushion to hold before prepaying.
Underwater? If you owe more than the car is worth, paying down faster shortens the time you would have a shortfall if it were stolen or totaled. The car value calculator shows when the balance falls below the car's value. If you carry GAP coverage, the CFPB notes you may be due a refund when you prepay the loan.
Costlier debt or an employer match first. Money on a card at 24% does more than money on a 7% car loan; the snowball or avalanche calculator orders your debts, and the 401(k) match calculator weighs a match against paying down debt.
All four happen in your browser. Your figures are not sent anywhere — the email opens in your own mail app, already filled in.
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