Save With Extra Payments (2022)

Leandro Mortenegro

If you’re thinking of paying your car off early, a car payoff calculator can help you decide if it’s a good idea. A payment calculator will show you the total interest you’d save by paying your car off early and when you’d finish paying the loan. Keep in mind that some auto loans have prepayment penalties, and a calculator won’t take that into account.

In this article, we at the Home Media reviews team will show you how to use an auto loan payment calculator to decide what to do. Be sure to check out the best auto loan rates if you’re in the market for a new vehicle.

What Is a Car Payoff Calculator?

A car payoff calculator lets you see what would happen if you paid more on your car payment each month. Online calculators usually ask for a number of variables, including these:

  • Interest rate
  • Remaining loan term
  • Remaining loan balance
  • Extra monthly payment amount

What Does a Car Payoff Calculator Tell You?

When you use a car payoff calculator, you’ll see the effect of paying more on your car loan each month. For example, if you want to pay an extra $100 each month, the calculator will determine what that would amount to over time and how it would change your expected payoff date.

A car payoff calculator also tells you how much interest you’d save. Since interest accrues over time, you’d pay less if you finished repaying the loan faster.

Keep in mind that your actual monthly car payment won’t change even if you pay extra for a period of time. You’ll just repay the loan sooner and save some interest.

How To Use a Car Payoff Calculator

To use a car payoff calculator, input information about your loan and estimated additional monthly payment amount. You’ll then see how early you’d finish paying the loan and how much interest you’d save.

Information Needed To Use an Auto Loan Calculator

Different calculators may ask different questions about your loan. Still, it’s a good idea to gather the following loan information to ensure an accurate result:

  • Total loan amount
  • Total payment term
  • Number of months left on your loan
  • Remaining loan balance
  • Interest rate
  • Current monthly payment
  • Extra amount you expect to pay each month

Car Loan Payoff Calculator Example

Below, you can see example payoff information if you paid $100 extra each month on a $20,000 loan with 36 months remaining in the term. Those extra payments would help you finish repaying the loan seven months early and save more than $200 in interest.

Making One Large Extra Payment

What if you want to make a large one-time payment on your auto loan? Most auto loan payoff calculators calculate extra monthly payments, not a single lump-sum payment. However, you can find an estimate by doing your own calculations.

  1. Write down the remaining months and current balance.
  2. Write down your current monthly payment.
  3. Subtract the lump sum from the current balance.
  4. Divide the remainder by your monthly payment.
  5. The result is the approximate number of months it would take to pay the loan off.

As an example, let’s say you have $12,000 left on your loan and there are 36 months remaining in the term. Your payment is $333.

Now, say you want to pay an extra $4,000 this month. You’d subtract that from the remaining balance of $12,000 to get $8,000. Then, divide this $8,000 by your monthly payment amount of $333. This gives us 24, which is the number of months it would take to pay off $8,000 with your payment amount. In other words, you’d finish the auto loan 12 months early.

Of course, this is a rough estimate because it doesn’t take your current month’s payment into account or any prepayment penalties that might be in your loan disclosures.

Should You Pay Your Car Off Early?

There are a couple of reasons to pay your car loan off early. First, it’s nice to get rid of a monthly payment. You can enjoy full vehicle ownership sooner.

Another reason to make extra car loan payments is to save money on interest. This effect is more pronounced if you have a high interest rate or if you start making extra payments early in the loan term.

When Not To Pay Your Car Off Early

You may not want to pay your car off early if the loan includes a prepayment penalty. This is a fee some lenders will charge if you want to pay the debt off before the loan term ends, so you have to weigh this fee amount with the interest you could save. That’s one reason why using a car loan calculator for early payoff is helpful.

Average Auto Loan Rates

How much money you save with early payoff can depend on your annual percentage rate (APR). You’ll save more by paying your car off before the loan term ends if you have a higher rate.

According to Experian’s Q2 2022 State of the Automotive Finance Market report, the average rate for new car loans is 4.33% and the average rate for used car loans is 8.62%. Below, you can see average auto loan interest rates by credit score.

Factors That Affect Auto Loan Rates

A variety of factors influence the annual interest rates you find. These include:

  • Credit score
  • Payment history
  • Debt-to-income ratio
  • Credit mix
  • Vehicle value and down payment
  • Length of the loan

Car Payoff Calculator: Conclusion

It can be a good idea to pay off your car loan early if you’re able to. A car payoff calculator will show you how early you’d finish repaying the loan and how much you’d save in interest. Check your loan documents for prepayment penalties, as these may offset any benefit you get from an early payoff.

Our Recommendations for Auto Loans

If you’re thinking about buying a new or used car, we recommend comparing lenders to get the best rate. This is even helpful to do if you plan to go to a dealership because it can give you leverage to negotiate a better rate. Two of our top picks are myAutoloan and Autopay.

MyAutoloan: Best Low-rate Option

Starting APR: 3.69% for new car loans

Loan amounts: $8,000 to $100,000

Loan terms: 36 to 84 months

Better Business Bureau (BBB) rating: A+ with accreditation

The car loan comparison website myAutoloan can give you up to four offers at one time. The company offers new and used car loans, plus refinancing, private party and lease-buyout loans. New car loan rates from myAutoloan start at 3.69% for loans between 37 and 60 months, and its best auto refinance rates start at 1.99%. MyAutoloan has an A+ rating with accreditation from the Better Business Bureau (BBB).

Keep reading: myAutoloan review

Autopay: Most Well-rounded

Starting APR: 1.99%

Loan amounts: $2,500 to $100,000

Loan terms: 24 to 96 months

BBB rating: A+

Autopay works with a wide network of lenders, like credit unions and banks, to offer financing to a variety of drivers. The auto loan comparison site offers vehicle purchase loans and refinance auto loans, and its rates start at 1.99% for borrowers with the best credit. Autopay has an A+ rating from the BBB with a customer review score of 4.3 out of 5.0 stars.

Car Payment Calculator: FAQ

Our Methodology

Because consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best auto loan companies. We collected data on dozens of loan providers to grade the companies on a wide range of ranking factors. The end result was an overall rating for each provider, with the companies that scored the most points topping the list.

Here are the factors our ratings take into account:

  • Reputation (30% of total score): Our research team considered ratings from industry experts and each lender’s years in business when giving this score.
  • Availability (20% of total score): Companies that cover a variety of circumstances are more likely to meet borrowers’ needs.
  • Loan Details (15% of total score): We considered the types of loans, term lengths and loan amounts that are available from each lender to determine this score.
  • Rates (25% of total score): Auto loan providers with low APRs scored highest in this category. Available discounts were also taken into account.
  • Customer Experience (10% of total score): This score is based on customer satisfaction ratings and transparency. We also considered the responsiveness and helpfulness of each lender’s customer service team.


*Data accurate at time of publication.

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