Can anybody tell me...Do you have to pay the interest on a car loan if you should decide to pay it off early?

Question:
I am going to pay off the loan on my vehicle and they quoted me a pay-off with the interest. I thought that if you paid it off early, you would not have to pay back all of the interest...Please advise...
Thanks!

Answers:

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You have to pay the principal plus whatever interest has accumulated up til the day you pay it off. Most finance companies will quote a payment with interest for the next 15 days and you will get a small check back when you get your title. They do it this way because this is better than them saying "hey, you still owe us $1.47 plus whatever interest builds between now and the time you pay us."

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you still have to pay interest that is calculated up to that date, but any future interest that you would of been paying on each monthly payment is now waived.

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that is why when you call for a pay off total, they normally tell you a date that its good till. that is when that next montly cycle of interest comes around altering the payment.

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That information would be in your papers as well. They make money from the interest paid out. There is a penalty if you pay off the loan early. It is all there on the form.

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You only pay interest UP TO the day you pay it off.

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you only have to pay part of it called (fees)

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You only have to pay the interest for the amout of time you have the loan. I bought a car and then turned around and paid off the note 4 months later...paying 4 months of interest plus the amount of the car.

If you are a car dealer or were a car dealer??

No. unless your state allows a lender to charge penalties for early payoff. most states have a no penalty for early payoff law. but check with your bank. Ask them if you pay them off early is there penalties, or read your sales contract it will tell you.
Read the fine print on the back of your sales contract it tells you everything you need to know.
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