Car Loan Early Payoff Calculator

Measure how extra contributions adjust your loan timeline

Calculation Methodology

Monthly Payment Formula

Loan payments follow the classic amortization formula:

M = P × [r(1+r)^n] / [(1+r)^n – 1]
  • M: Calculated monthly payment
  • P: Original loan amount
  • r: Monthly interest (APR/12)
  • n: Number of scheduled payments

Interest Calculation

Each payment period includes:

Interest = Current Principal × Monthly Rate
Principal = Payment – Interest Cost
Revised Balance = Previous Balance – Principal Portion

    Prepayment Impact

    When you add extra payments, they reduce principal immediately. This lowers future interest charges, helping the loan finish sooner and saving significant interest.

    Lump Sum Payment

    A one-time lump sum reduces principal instantly and affects all future interest calculations.

    References

    • Standard Principles of Amortization
    • CFPB Loan Calculation Resources
    • Federal Reserve Mortgage Guidelines

    Disclaimer: Calculations shown are estimates. Your lender’s actual terms, fees, and calculation methods may differ. Always verify details with your loan provider.