Page published October 27, 2026
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The saving is smaller than many people expect, and that is worth saying plainly: most of the interest on a 60 month loan is already committed by the time extra payments start, and extra payments only cancel future interest, they do not refund interest already paid.
Go ahead, play with it. Change any number and watch the total move.
Pay off your car loan early calculator
Enter what is left on the loan today, your rate, your current payment, and the extra you can add each month. The calculator works month by month: interest is charged on the balance that is left, then your payment comes off, and any extra goes to principal. It assumes the extra is applied to principal, not held as an advance on future payments, and it assumes no prepayment penalty. Check both points in your loan terms, since either one changes the result.
APR is the yearly interest rate on the loan, in percent, the price of borrowing, before fees.
How to read it: the saving is the interest you never pay because the balance falls faster. The first extra $100 a month saves more than the second, because each extra dollar only cancels interest on the balance still left.
Where the numbers come from: Remaining balance: Experian, Q2 2026, average loan $43,610 new, $27,852 used · Interest rate: Experian, Q2 2026, average 6.35% new, 11.19% used · Current monthly payment: Experian, Q2 2026, average $765 new, $542 used.
Worked example: $25,000 at 8% over 60 months
| Version | Monthly payment | Months to pay off | Total interest |
|---|---|---|---|
| As agreed, no extra payments | $507 | 60 | $5,415 |
| Extra $100 a month from month 13 onward | $607 | 51 | $4,729 |
| Saved by the extra payments | 9 months | $686 |
The calculator above gives the same answer from the other end. After 12 payments the balance on that loan is $20,764. Enter $20,764, 8%, a $506.91 payment and $100 extra, and it shows 39 months left instead of 48, $686 of interest saved, $23,646 paid in total instead of $24,332, and a payoff date of February 2030 instead of November 2030, counting from November 6, 2026.
The base payment is $506.91 a month, shown rounded as $507, for total interest of $5,415. With $100 extra from month 13 onward, the loan ends in month 51 instead of month 60, and total interest is $4,729. The difference is $686. The extra payments themselves total about $3,900 across the 39 months they are paid, plus a smaller final payment, and they return $686 of interest avoided plus 9 months of freedom from the payment. That is a good return for money that would otherwise sit idle, and a poor return if the same money is needed for an emergency fund or for higher interest debt.
Before sending extra money, check three things
First, check for a prepayment penalty in the loan terms. Most auto loans do not have one, but a loan that does can erase the saving. Second, confirm the extra money is applied to principal, not held as an advance on future payments, since an advance payment does not cut interest the same way. Third, compare the loan rate against other debts: extra money sent to a credit card at a far higher rate saves more than extra money sent to an 8% car loan, and an emergency fund that prevents a missed payment protects the credit score that decides the next loan rate. See what your credit score costs on a car loan for why that score matters in dollars.
Also check whether the loan uses precomputed interest, sometimes called the Rule of 78s. On a precomputed loan the interest for the whole term is figured up front, so paying early saves less than the calculator shows. Most auto loans today use simple interest, where interest is charged each month on the balance that is left, but the loan terms say which one it is.
This is a different decision from paying cash or financing at purchase. That page compares two ways to buy a car in the first place. This page is about a loan that already exists, and extra payments on it. For the case where a new loan replaces the old one, see should you refinance your car loan.
Figures: Driveonomics amortization arithmetic on a $25,000 loan at 8% over 60 months, with $100 extra a month from month 13 onward. Totals rounded to the nearest dollar.
Educational estimates only, not financial, tax, legal or insurance advice. Every figure on this page is a typical example worked from the inputs stated on the page, not a quote for a specific car, loan, or driver. Your rate, insurance, fuel use, and resale value will move your total. See Terms.
Calculation transparency
Jurisdiction. United States. Loan terms, prepayment rules and tax treatment are set by the loan agreement and by state law, so your exact numbers depend on your own loan.
Rules and time period. The worked example uses a $25,000 loan at 8% over 60 months with $100 extra a month from month 13 onward. The calculator example counts from November 6, 2026, with a remaining balance of $20,764 after 12 payments. Benchmarks are Experian Q2 2026: average payment $765 a month on a new car and $542 on a used car, average loan $43,610 new and $27,852 used, average APR 6.35% new and 11.19% used.
Scope and limitations. Educational estimate only. The calculator assumes extra money goes to principal, with no prepayment penalty and simple interest charged each month on the balance that is left. A loan with precomputed interest, a penalty, or extra money held as an advance on future payments saves less. Totals are rounded to the nearest dollar.
Source links checked November 6, 2026. Figures: Experian State of the Automotive Finance Market (Q2 2026); Driveonomics amortization arithmetic on the inputs stated on the page.
Primary sources: Experian, average car payment and loan rates; Experian, how to lower your car payment. How the numbers are calculated is written down on the methodology page, and every source is listed on the sources page.
How to use
- Enter your remaining balance. That is what is left on the loan today, from your loan statement, not the price of the car when you bought it. The example uses $20,764, the balance left after 12 payments on a $25,000 loan at 8%.
- Enter your APR. The rate on your loan statement. Experian's Q2 2026 averages are 6.35% on a new car and 11.19% on a used car, if you want a sense of where your rate sits.
- Enter your current monthly payment. The payment on your loan statement. Experian's Q2 2026 averages are $765 a month on a new car and $542 on a used car.
- Enter the extra you can add each month, and any one-time lump sum. The example uses $100 extra a month and no lump sum. Leave the lump sum at 0 if there is none.
- Read the interest saved, the months saved, and the new payoff date. Then try a bigger extra, or a lump sum, and compare. The first $100 a month saves more than the second $100, because each extra dollar only cancels the interest on the balance that is still left.
Formula
Each month, interest equals the balance that is left times the APR divided by 12. That interest is added to the balance, then your payment comes off, and any extra comes off on top of the payment. The lump sum, if there is one, comes off the balance before the first month. The same steps repeat, month after month, until the balance reaches zero. The last payment is smaller than the rest, because it only pays what is left.
Months to pay off is the number of months the steps take. Total interest is all the monthly interest added up. Total paid is all the payments added up, plus any lump sum. Interest saved is total interest with no extra minus total interest with the extra. Months saved is months with no extra minus months with the extra. The new payoff date is today plus the months left with the extra.
The worked example runs the same steps twice. On a $25,000 loan at 8% over 60 months, the payment is $506.91 a month and total interest with no extra is $5,415. With $100 extra from month 13 onward, the loan ends in 51 months with $4,729 of interest, so $686 is saved and 9 months are saved. From the $20,764 balance left after 12 payments, the same steps give 48 months and $3,568 of interest with no extra, and 39 months and $2,882 of interest with the extra, the same $686 saved.
The calculator assumes the extra goes to principal, with simple interest and no prepayment penalty. A loan with precomputed interest, sometimes called the Rule of 78s, figures the interest for the whole term up front, so paying early saves less than these steps show.
Definitions
Remaining balance. What is left to pay on the loan today, after the payments already made. Not the price of the car when it was bought.
APR. Annual percentage rate, the yearly cost of borrowing. Experian's Q2 2026 averages are 6.35% on a new car and 11.19% on a used car.
Monthly payment. The fixed amount paid each month under the loan agreement. Experian's Q2 2026 averages are $765 a month on a new car and $542 on a used car.
Extra payment. Money paid each month on top of the regular payment. The calculator assumes it goes to principal.
Principal. The part of the loan that is still owed, before interest. Paying principal down cuts the interest charged in later months.
Prepayment penalty. A fee some loans charge for paying early. Most auto loans do not have one, but where it exists it can erase the saving.
Precomputed interest, or the Rule of 78s. A loan where the interest for the whole term is figured up front. Paying early saves less on such a loan than on a simple-interest loan.
Simple interest. Interest charged each month on the balance that is left. Most auto loans today work this way, and the calculator on this page assumes it.
Questions people actually ask
How much interest does paying $100 extra a month save on a car loan?
On a $25,000 loan at 8% over 60 months, adding $100 a month from month 13 onward saves $686 in interest, from $5,415 to $4,729, and finishes the loan in 51 months instead of 60, which is 9 months early. Your own saving depends on the balance, the rate, and how early the extra payments start.
Why is the saving only $686?
Because most of the interest on a 60 month loan is already committed by the time extra payments start, and extra payments only cancel future interest, they do not refund interest already paid. Starting extra payments earlier, or paying a larger extra amount, saves more, because more future interest is cancelled.
Should extra payments go to principal?
Yes. Confirm the extra money is applied to principal, not held as an advance on future payments, since an advance payment does not cut interest the same way. Also check the loan terms for a prepayment penalty, which most auto loans do not have but which can erase the saving where it exists.
Is paying a car loan early better than paying other debts?
Not always. Extra money sent to a higher rate debt, such as a credit card, saves more than extra money sent to an 8% car loan, and an emergency fund that prevents a missed payment protects the credit score that decides the next loan rate. Compare rates before choosing where the extra money goes.
What does an extra $200 a month save instead of $100?
On the same remaining balance of $20,764 at 8% with a $506.91 payment, an extra $200 a month finishes the loan in 33 months instead of 48, which is 15 months early, and saves $1,146 in interest, from $3,568 to $2,422. The first $100 saves $686, so the second $100 saves another $460.
Related: Does paying twice a month save money, or does paying every two weeks?
Related: Long loans are where early payoff helps most. See whether an 84-month loan is a good idea.
Related: Paying early also gets you out of being upside down. See what being upside down costs.
Related: Paying off the loan first changes the trade-in math. See whether to trade in or sell it yourself.