🚗 Paying Off Car Loan Early Calculator

Wiping out debt early usually feels like a smart move. But an early repayment fee completely changes the math. As Kayleigh June notes, if we do go ahead and pay it out now fully, there's going to be a fee attached to that. And it's like a fairly substantial fee. This calculator helps you compare the sting of a prepayment penalty against the interest you save by destroying the loan today.

Enter the current balance and remaining term of your car loan, along with the penalty your lender charges for early payoff. Even if the fee seems steep, you might actually pay more in remaining interest by keeping the loan alive.

As Kayleigh June puts it, that'll be another $357 each month that we can just kind of get rid of and not have to pay, which will be great. The right move depends on whether the penalty outweighs those guaranteed interest savings.

If you hold onto your lump sum instead of paying off the debt, that cash can sit in a high-yield savings account. The interest you earn month-to-month helps offset the cost of keeping the loan alive.

As Kayleigh June explains, what we've decided to do just at the moment at least is to keep that money aside in an account where we only dip into it for the car loan repayments each month. Enter your expected savings yield below to test this strategy.