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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?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“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.”View full answer
- Gregory R.
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