Auto Loan Extra Payment Calculator
This auto loan extra payment calculator shows how much adding extra to your monthly car payment saves in interest and time. Enter your balance, rate, term, and a recurring extra amount in the calculator above. It instantly compares your original payoff to a faster one. You see your total interest saved and the months you shave off your loan.
How it's calculated
Extra payments work by reducing your loan principal, which is the amount you still owe. On a simple-interest auto loan, interest is charged on your outstanding balance each day or month. So a smaller balance means less interest going forward. The calculator above takes your scheduled payment and adds your extra amount, applying the full extra to principal. It then rebuilds your payoff schedule month by month.
The savings compound over time. Each extra dollar cuts the balance, so the next month's interest is a little lower. That frees up even more of your normal payment to attack principal, speeding up the loan with every cycle. To compare a one-time lump sum instead, try the auto loan payoff calculator.
A worked example
Say you owe $25,000 at 8% APR on a 72-month auto loan. Your scheduled payment is $438.33. In the first month, $166.67 goes to interest and $346.66 goes to principal once your $75 extra is applied. By keeping up that extra $75 every month, you pay only $5,328 in total interest. You also clear the loan in 60 months instead of 72. That is $1,232 saved in interest and 12 months off your term.
Common mistakes to avoid
- Not telling your lender to apply the extra money to principal. The CFPB notes lenders may instead treat it as your next payment, so request principal in writing and check your statement.
- Skipping the prepayment penalty check. Some auto contracts charge a fee for paying early, so review your loan documents and state law first.
- Assuming a precomputed-interest loan rewards extra payments. With precomputed interest, extra payments do not reduce the interest owed, so confirm you have a simple-interest loan.
- Waiting until late in the term to pay extra. Early principal payments save the most interest because more of your balance is still accruing.
- Spreading small amounts thin instead of a single lump sum. One lump sum applied early beats the same total dribbled in late.
Frequently asked questions
How much do extra payments save on a car loan?
Extra payments save both interest and time on a car loan. On a $25,000 loan at 8% APR over 72 months, adding $75 a month cuts total interest to $5,328. That saves $1,232 in interest and pays the loan off 12 months early. Use the auto loan extra payment calculator above to run your own numbers.
Do I have to tell my lender to apply extra payments to principal?
Yes, in most cases you should. The CFPB says you may need to request that your lender apply extra money to principal rather than your next payment. Make the request in writing and check your next statement to confirm the principal dropped.
Will I pay a penalty for paying my auto loan off early?
It depends on your contract and state law. The CFPB explains that some auto loans carry a prepayment penalty to offset lost interest, while some states ban them. Review your loan documents before making large extra payments.
Are biweekly payments better than monthly extra payments?
Biweekly payments can help in a quiet way. Paying half your payment every two weeks adds up to 26 half-payments, which equals 13 full monthly payments a year instead of 12. That extra payment goes straight to principal and shortens your loan.
Does extra payment timing matter on a simple-interest loan?
Yes. On a simple-interest auto loan, interest is charged on your balance each day or month, so paying extra earlier reduces interest more. A lump sum applied early in the term saves more than the same amount spread out near the end.