Case 1
- What do you still owe?
- 25000
- Annual interest rate (APR)
- 6.5%
- Remaining term
- 60
- Extra payment per month
- 100
11
Open with these valuesAuto Loan Early Payoff Calculator
11months
Result: 11 monthsInterest is charged each month on what is still owed, so every extra euro of principal shrinks next month's interest as well. The loan then ends in a whole month earlier than planned. On the default figures, 100 a month extra ends a five-year loan eleven months early and saves 865.44 in interest.
Worked examples
Case 2
- What do you still owe?
- 30000
- Annual interest rate (APR)
- 7.9%
- Remaining term
- 72
- Extra payment per month
- 150
19
Open with these valuesCase 3
- What do you still owe?
- 15000
- Annual interest rate (APR)
- 4%
- Remaining term
- 48
- Extra payment per month
- 0
0
Open with these valuesHow it's calculated
Balance(m+1) = Balance(m) × (1 + i) − (M + extra), i = APR ÷ 12
- StepEnter the current balance, not the original price of the car.
- StepAdd the APR from your loan agreement and the months still to run.
- StepEnter the extra amount you would put toward principal each month.
- ResultRead how many whole months earlier the loan is paid off.
What this number means
The saving is interest, not the extra you pay
The extra money repays your own debt; what you save is the interest it no longer accrues. On the default figures, 100 a month extra saves 865.44 and ends the loan eleven months early.
The answer moves in whole months
A loan ends on a payment date, so a small change in the extra payment often leaves the payoff date untouched and then moves it by a full month. That is why 30000 at 7.9 % and 40000 at 9 % both come out at 19 months saved.
Say that the extra goes to principal
Some lenders apply extra money to the next scheduled payment instead, which is paying ahead and saves no interest at all. Check the contract for a prepayment penalty as well — the interest saved here does not subtract one.
Commonly misread
Paying 100 a month extra for five years saves me 6000.
The 6000 is your own principal coming back off the balance. The saving is the interest it no longer accrues, which is 865.44 on the default figures.
Enter the price of the car.
Enter the balance you still owe. Starting from the purchase price overstates both the payment and the months saved.
A slightly bigger extra payment always brings the payoff date forward.
Only whole months are shown, so small increases often change nothing. The date then jumps by a full month at once.
Reference table
| Loan, rate, months, extra | Interest saved | Months saved |
|---|---|---|
| 25000, 6.5, 60, 100 | 865.44 | 11 |
| 25000, 6.5, 60, 200 | 1439.13 | 19 |
| 30000, 7.9, 72, 150 | 2153.39 | 19 |
| 40000, 9, 72, 200 | 3332.85 | 19 |
| 20000, 0, 60, 50 | 0.00 | 7 |
| 15000, 4, 48, 0 | 0.00 | 0 |
Questions
How does paying extra on a car loan save time?
Interest is charged each month on the remaining balance, so every extra euro toward principal shrinks that balance and the interest that accrues on it. The effect compounds: a smaller balance this month means even less interest next month, and more of the fixed payment goes to principal. The calculator simulates the loan month by month and reports when the balance reaches zero.
Will my lender apply the extra to principal?
Usually, but you often have to say so. By default some lenders apply extra money to the next scheduled payment, which is just paying ahead and saves no interest at all. Mark extra payments as going to principal, and check that your loan has no prepayment penalty.
Why does the answer jump in whole months?
Because a loan ends on a payment date, not part-way through a month. Small changes in the extra payment often leave the payoff date unchanged, then move it by a full month at once. That is why 30000 at 7.9 % and 40000 at 9 % both come out at exactly 19 months saved.
Should I pay off my car loan early?
Paying off a loan early is a guaranteed return equal to its interest rate, so it depends on your alternatives. If the car loan charges 7 % and you carry no dearer debt, prepaying beats most safe investments. But clear credit-card debt at 20 % first, and keep an emergency fund before throwing spare cash at a cheap loan.
What is a prepayment penalty?
It is a fee some lenders charge for repaying a loan ahead of schedule, to recover interest they would otherwise have earned. Many car loans do not have one, but check your contract before making large extra payments. The interest-saved figure in the table does not subtract any such fee.
How exact is the result?
The simulation is exact for a fixed-rate, fully amortising loan with the inputs you give. Real loans can differ slightly through lender rounding, the exact day a payment posts, daily rather than monthly interest accounting, and fees. Treat it as a close planning estimate and confirm with your lender before a large prepayment.
Sources and last check
Information, not financial advice.