Paying Off Your Auto Loan Early

Auto loans are simple-interest loans: interest accrues on the daily balance, so every extra dollar you pay shortens the loan and skips future interest. Extra payments are usually applied to principal (confirm with your lender), which is what makes them powerful. On a $25,000 loan at 6.5% APR with 48 months remaining, an extra $100 per month roughly cuts months off the term and saves hundreds in interest. This calculator runs your exact amortization both ways so the payoff date and savings are precise.