How much money could I save if I pay off my $25,000 car loan early?

I owe $20,000 on my $25,000 loan. The current interest rate is five percent, and I still need to pay for 48 months. How much can I save if I pay my loan off early?

Answer provided by
Eric Schad
Answered on Apr 27, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
“If you have $20,000 for the payment of the loan, you stand to save thousands at a five percent interest rate. That said, you need to make sure the decision makes financial sense; don’t stretch your finances too thin.
On top of saving thousands, you could also save money because your lender will no longer require you to carry full-coverage car insurance. While it may be a good idea to keep collision coverage or comprehensive coverage, you could always switch to liability only.”

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