💳Car Loan Early Repayment Savings Calculator

Calculate interest savings from early car loan repayment from remaining principal and rate

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Car Loan Early Repayment Savings Calculator Guide

Making a lump-sum payment on your car loan can save you a surprising amount in interest. The calculator shows you the total interest you'd pay without prepayment versus after applying your extra payment, assumes you keep the same monthly payment (which shortens the loan term), and tells you exactly how many months you'll cut off. Use it when you get a bonus, tax refund, or windfall and are deciding between paying down the loan or keeping cash on hand.

Formula

Monthly payment = P × r × (1+r)^n / ((1+r)^n − 1). After prepayment, the same payment applied to the reduced balance results in fewer months — the interest difference is your savings.

Frequently Asked Questions

Does paying extra principal lower my payment or shorten the loan?

This calculator assumes same monthly payment (shorter term). If you want to lower your payment instead, contact your lender to recast the loan.

Are there prepayment penalties on auto loans?

Many auto loans have no prepayment penalty, but some do — especially loans from dealerships or finance companies. Check your loan contract before paying extra.

Should I pay off my car or invest the money?

Compare your loan APR to your expected investment return. If your loan rate is higher, paying it down is the better guaranteed return.