Early Payoff Formula:
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This calculator determines the remaining balance (payoff amount) needed to completely pay off an auto loan early. It helps borrowers understand how much they would need to pay to settle their loan immediately.
The calculator uses the early payoff formula:
Where:
Explanation: The formula calculates the present value of all remaining payments at the loan's interest rate.
Details: Knowing your payoff amount is essential when considering refinancing, selling your vehicle, or paying off your loan early to save on interest.
Tips: Enter your regular monthly payment amount, monthly interest rate (divide APR by 12), and the number of payments remaining. All values must be positive numbers.
Q1: Why would I want to pay off my auto loan early?
A: Early payoff can save you money on interest and free up your monthly budget, though some loans have prepayment penalties.
Q2: How do I find my monthly interest rate?
A: Divide your annual percentage rate (APR) by 12. For example, 6% APR becomes 0.06/12 = 0.005 monthly rate.
Q3: Does this account for prepayment penalties?
A: No, this calculates only the remaining principal and interest. Check your loan terms for any additional fees.
Q4: Is it better to pay extra each month or save for a lump sum payoff?
A: Paying extra each month saves more interest overall, as it reduces the principal faster.
Q5: How accurate is this calculator?
A: It provides a close estimate, but your lender may use slightly different methods or account for minor variations in payment dates.