How to Determine the Payoff of a Car Loan

An auto loan is one of the biggest loans you will take out in your life. Your auto loan depends on the amount of money that you paid down on the car and your interest rate, and can cost you as much as several hundred dollars every month. Paying off an auto loan is often a big relief and means extra spending money with every paycheck. Only a few simple calculations are needed to figure out how much you need to pay off your auto loan ahead of time.

Instructions

1

Determine the principal amount of your loan. This can be found on the loan contract or your bill stub. It is the amount of money that was loaned.

2

Determine the annual percentage yield (APY) of your car loan. This can be done by subtracting your monthly rate from one and then multiplying this total by the number of years of your loan minus one. In other wods, APY=(1 - rate per period)(number of periods in a year - 1). This is the total interest of the loan.

3

Add your answer from Step 2 to your answer from Step 1.

4

Add the total amount of payments you have made thus far. Subtract this number from your answer in Step 3.

5

Add onto the answer from Step 4 any prepayment fees included in your contract. This figure equals the payoff for your car loan.