Save with additional payments (2022)
If you’re considering paying off your car early, a car reimbursement calculator can help you decide if it’s a good idea. A payment calculator will show you the total interest you’d save by paying off your car sooner and when you’re done paying off the loan. Keep in mind that some auto loans have prepayment penalties, and a calculator won’t take that into account.
In this article, the Home Media review team will show you how to use an auto loan repayment calculator to decide what to do. Be sure to check out the best car loan rates if you are looking for a new vehicle.
What is a car gain calculator?
A car payment calculator lets you see what would happen if you paid more on your car payment each month. Online calculators typically ask for a number of variables, including these:
- Interest rate
- Remaining term of the loan
- Remaining loan balance
- Additional Monthly Payment Amount
What does a car gain calculator tell you?
When you use a car repayment calculator, you’ll see the effect of paying more on your car loan each month. For example, if you want to pay $100 more each month, the calculator will figure out what that would be over time and how that would change your expected payment date.
A car gain calculator also tells you how much interest you would save. Since interest accumulates over time, you would pay less if you finished paying off the loan sooner.
Keep in mind that your actual monthly payment for the car won’t change even if you pay extra for a while. You will simply repay the loan sooner and save interest.
How to use a car gain calculator
To use a car payment calculator, enter information about your loan and the estimated amount of the additional monthly payment. You will then see how long you will finish repaying the loan and how much interest you will save.
Information Needed to Use an Auto Loan Calculator
Different calculators may ask different questions about your loan. Nevertheless, it is a good idea to gather the following loan information to ensure an accurate result:
- Total loan amount
- Total payment term
- Number of months remaining on your loan
- Remaining loan balance
- Interest rate
- Current monthly payment
- Additional amount you plan to pay each month
Sample Car Loan Repayment Calculator
Below, you can see sample earnings information if you paid $100 more each month on a $20,000 loan with 36 months remaining on the term. These extra payments would help you finish paying off the loan seven months sooner and save over $200 in interest.
Make a big extra payment
What if you want to make a large one-time payment on your car loan? Most car loan repayment calculators calculate additional monthly payments, not a single lump sum payment. However, you can find an estimate by doing your own calculations.
- Note the months remaining and the current balance.
- Write down your current monthly payment.
- Subtract the lump sum from the current balance.
- Divide the remainder by your monthly payment.
- The result is the approximate number of months it would take to repay the loan.
As an example, let’s say you have $12,000 left on your loan and 36 months left in the term. Your payment is $333.
Now let’s say you want to pay $4,000 more this month. You subtract that from the remaining balance of $12,000 to get $8,000. Then divide that $8,000 by your monthly payment amount of $333. That gives us 24, which is the number of months it would take to repay $8,000 with your payment amount. In other words, you would finish the car loan 12 months earlier.
Of course, this is a rough estimate, as it does not take into account your current month’s payment or any prepayment penalties that may appear on your loan statements.
Should you pay off your car sooner?
There are a few reasons for pay off your car loan sooner. First, it’s nice to get rid of a monthly payment. You can enjoy full ownership of the vehicle sooner.
Another reason to make extra payments on the car loan is to save money on interest. This effect is more pronounced if you have a high interest rate or start making extra payments early in the loan term.
When not to pay for your car early
You may not want to pay off your car sooner if the loan includes a prepayment penalty. These are fees that some lenders will charge if you want to pay off the debt before the end of the loan term. You must therefore weigh the amount of these costs with the interest you could save. This is one of the reasons why using a car loan calculator for prepayment is helpful.
Average car loan rates
The amount of money you save with a prepayment may depend on your annual percentage rate (APR). You’ll save more by paying off your car before the end of the loan term if you have a higher rate.
According to Experian Q2 2022 State of the car finance market report, the average rate for new car loans is 4.33% and the average rate for used car loans is 8.62%. Below you can see the average car loan interest rate by credit score.
Factors That Affect Auto Loan Rates
A variety of factors influence the annual interest rates you find. These include:
- Credit score
- Payment history
- Debt to income ratio
- Composition of credit
- Vehicle value and deposit
- term of the loan
Car gain calculator: conclusion
It may be a good idea to pay off your auto loan early if you are able. A car payoff calculator will tell you when you’ll finish paying off the loan and how much you’ll save in interest. Check your loan documents for prepayment penalties, as these may offset any benefit you get from prepaying.
Our recommendations for car loans
If you’re considering buying a new or used car, we recommend comparing lenders to get the best rate. It’s even useful if you’re planning on going to a dealership as it can give you leverage to negotiate a better rate. Two of our top picks are myAutoloan and Autopay.
MyAutoloan: best low rate option
From April: 3.69% for new car loans
Loan amounts: $8,000 to $100,000
Loan conditions: 36 to 84 months
Rating from the Better Business Bureau (BBB): A+ with accreditation
The myAutoloan auto credit comparison site can offer you up to four offers at a time. The company offers new and used car loans, as well as refinances, private party and lease-purchase loans. MyAutoloan’s new auto loan rates start at 3.69% for loans between 37 and 60 months, and its best auto refinance rates start at 1.99%. MyAutoloan has an A+ rating with Better Business Bureau (BBB) accreditation.
keep reading: myAutoloan review
Automatic payment: the most complete
From April: 1.99%
Loan amounts: $2,500 to $100,000
Loan conditions: 24 to 96 months
BBB rating: A+
Autopay works with an extensive network of lenders, like credit unions and banks, to provide financing for a variety of drivers. The auto credit comparator offers loans for the purchase of a vehicle and refinance auto loans, and its rates start at 1.99% for borrowers with the best credit. Autopay has an A+ rating from the BBB with a score of 4.3 out of 5.0 stars.
Car Payment Calculator: FAQ
Because consumers rely on us to provide unbiased and accurate information, we’ve created a comprehensive rating system to formulate our ranking of the best car loan companies. We’ve collected data on dozens of loan providers to score companies on a wide range of ranking factors. The end result was an overall score for each vendor, with the companies scoring the most points at the top of the list.
Here are the factors taken into account by our assessments:
- Reputation (30% of total score): Our research team considered ratings from industry experts and each lender’s years in business to assign this rating.
- Availability (20% of total score): Companies that cover a variety of circumstances are more likely to meet the needs of borrowers.
- Loan details (15% of total score): We considered the loan types, terms and loan amounts available from each lender to determine this score.
- Prices (25% of the total score): Auto loan providers with low APRs scored highest in this category. Available discounts have also been taken into account.
- Customer experience (10% of total score): This score is based on customer satisfaction ratings and transparency. We also considered the responsiveness and helpfulness of each lender’s customer service team.
*Data correct at time of publication.