How to pay off a car early


How to pay off a car early


You might be looking to take control of your finances.

Maybe you want to change your vehicle for a new one.

Whatever the reason, pay off a car early and not only is the debt behind you, but you may have made a decent saving on interest payments, too.

There are various ways to approach paying off a vehicle and, if you haven’t already done so, a good place to start is simply getting familiar with the details of your note, like the amount, term and annual percentage rate (APR).

With these at hand, consider using an online calculator to help figure out how to pay off your car early.

A faster payoff with extra payments

RoadLoans’ early payoff calculator enables you to enter the price you paid for the vehicle, down payment, APR, the duration of the retail installment contract and the number of months remaining. Alternatively, just enter the original amount of the note into the vehicle price field, without having to enter the down payment as well.

You can then type in a dollar amount as an additional monthly payment to see by how many months the period of repayment is shortened, and what the saving in interest charges may be.

Adjusting the additional monthly payment will give you an idea of just how fast you might be able to pay off the vehicle.

Here’s an example.

Enter an amount of $25,000 with a 72-month term, 5 percent APR and 36 months remaining. Give it a helping hand of $100 as an additional monthly payment and the calculator estimates the time it takes to pay off the car is shortened by seven months, along with total interest savings of $220.41.

Increase the extra payment to $200 per month and not only has a whole year been knocked off, but $363.87 potentially has been saved in interest charges.

A large payment and the payoff amount

Another way you might pay off a car early is by making a single large payment that takes care of the outstanding debt in one go.

If you want to go ahead, you’ll need to get the payoff amount.

The payoff amount, also known as a payoff quote, may be different to the current balance of the note. More interest may have accrued since the date on the statement, which needs to be paid as part of the payoff.

There may be other factors that make a difference – a common one is a prepayment penalty. Factors can also include modifications to the contract, such as an extension to the term. Any deferred payments, or fees and charges that have been incurred and not paid, could affect the payoff figure, too.

A payoff request can be made in different ways depending on the lender, like calling a customer service agent, using an online service or visiting the lender’s branch.

Once you have the payoff amount, there may be a specified due date for payment, and preferred steps for the lender to receive it. Sometimes, the exact payoff amount will depend on the day payment is received. By checking the process with your lender you’ll be able to work with them to pay off what’s owed, which clears the path for free-and-clear ownership of the vehicle.

Car buyers who purchase a vehicle through RoadLoans have their retail installment contract serviced by Santander Auto Finance, which offers a quick-and-easy auto payoff process with no prepayment penalties. Customers can call a service agent at (888) 222-4227 or fill out the online form to learn more.

Santander Auto Finance and RoadLoans are both part of Santander Consumer USA, one of the country’s leading auto lenders.

Find out more about RoadLoans at the “About us ” page, and go to “Overview” for further details about Santander Consumer USA.


Written by:

Competitive Rates

Lower your monthly car payments by applying for a car loan with

Apply for a Loan

*View disclosures & offer information