Finance
What Happens If You Pay Off Your Car Loan Early?
The Answer
$1,800 saved, 2 years early
The Full Picture
A $25,000 car loan at 6.5% over 60 months has a $488/month payment and costs $4,280 in interest. Adding just $200/month extra ($688 total) pays it off in 38 months — 22 months early — and saves $1,830 in interest. Unlike a mortgage, car loans amortize quickly so extra payments have big impact.
By the Numbers
Standard payoff time60 months
With $200 extra/month38 months
Interest without extra payment$4,280
Interest saved$1,830
Change the numbers
These numbers are just a scenario. Use our Loan Calculator to see what your specific situation looks like.