Car Loan Payoff Calculator

Extra payments on a car loan go straight at the balance, so the loan ends sooner and less interest is charged along the way. Example: a $20,000 balance at 9% APR with a $400 monthly payment takes 63 months and costs $5,160.87 in interest. Add $100 a month and it is gone in 48 months with $3,867.77 in interest, saving 15 months and $1,293.10. (Both worked examples are below.)

How the payoff math works

This calculator runs the loan month by month, the same way a lender does. A lump sum is subtracted from the balance first, before the next payment. Then, each month:

interest = balance × r, where r is the monthly rate. The rest of the payment, payment − interest, comes off the balance. Interest is rounded to cents each month, and the final payment is smaller than the rest: just the remaining balance plus that month's interest.

The same answer comes from the closed-form formula for the number of months n:

n = −ln(1 − (r × B) ÷ p) ÷ ln(1 + r), rounded up to whole months. Every variable:

Two assumptions are built in, and both matter. First, every extra dollar is applied to principal. Some lenders apply extra money to the next month's payment instead, which saves nothing, so tell your lender in writing that extra amounts go to principal. Second, there is no prepayment penalty. Most auto loans have none, but check your contract before sending a large lump sum.

If the payment is less than one month's interest (balance × r), the formula has no answer and the loan never pays off: the balance holds still or grows. This calculator says so plainly instead of printing a date.

Worked example 1: extra every month

A $20,000 balance at 9% APR, a $400 monthly payment, and $100 extra a month:

Worked example 2: a lump sum only

A $15,000 balance at 7.5% APR, a $350 monthly payment, no extra each month, and a $2,000 lump sum paid right away:

The lump sum counts in the total you pay: the with-lump-sum path costs $16,838.91 all in, against $17,514.22 without it. The difference is the $675.31 of interest that never gets charged.

What changes the answer most

When the extra money lands. Interest is charged on whatever balance is outstanding, so a dollar of extra principal in the first year kills more interest than the same dollar in the fourth year. A lump sum today beats the same amount spread over future months, which is why example 2 saves $675.31 with no monthly extra at all. The APR. At 0% APR extra payments save no interest at all; they only shorten the loan. The higher the rate, the more each extra dollar is worth. Consistency. A modest extra paid every month usually beats a large extra paid once and then forgotten, because it keeps the balance lower for the whole remaining term.

FAQ

Does my lender have to apply extra payments to principal?
No, and this is the most common way early payoff plans quietly fail. Some servicers treat extra money as an early next payment. Send extra amounts with a written instruction to apply them to principal, and check the next statement to confirm the balance dropped by the full extra amount.

Are there prepayment penalties on car loans?
They are uncommon on standard auto loans, and some states restrict them, but they do exist on some subprime and buy-here-pay-here contracts. Your loan agreement has a prepayment clause; read it before making a lump sum large enough for a penalty to matter.

Should I pay extra or keep the cash?
This calculator can only show the loan side: the interest saved is guaranteed, because it is interest you never owe. Cash kept in reserve covers emergencies a paid-off car cannot. The numbers here tell you exactly what the extra payments buy, and the decision on top of them is yours.

Why does the calculator say my loan never pays off?
Because the payment you entered is no more than one month of interest on the balance. At 12% APR on $10,000, interest alone is $100 a month, so a $100 payment never touches the balance. If your real loan is amortizing normally, the payment from your statement will be higher than that figure; a payment below it usually means a deferred or interest-only arrangement, which is worth a call to the lender.