How to Calculate an Automobile Payoff & Late Payment

Staying on top of your finances is critical when dealing with loans of any type, and one of the best ways to ensure proper and consistent management of your finances is to become familiar with loans. Car loans are often considered too difficult to understand, but with basic math, or the use of an online calculator, the average automotive borrower should have all the tools necessary to be informed and financially responsible. Calculating your automotive payoff and understanding the impact of late payments are two important ways to increase your familiarity with auto loans.

Instructions

1

Assemble the data pertaining to your loan from your loan information paperwork, including your remaining principal, interest rate, monthly payment, length of the loan, and how often interest is compounded (usually monthly). Write all this information down.

2

Divide your annual interest rate percentage by 12 and multiply it by your remaining principal. This is the amount of interest that will be applied to your loan this month. Add it to your principal and subtract your monthly payment. Write this new value down on paper next to the month and year. Repeat this process for each month of the loan, writing down the values as you go to ensure accuracy.

3

Total up all the monthly payments to find your total payoff amount. Subtract the original principal from the total payoff to find your overall interest paid.