. The prepayment penalty is perhaps the more important thought here, as it can cost between 2% and 4% of the remaining balance. Lenders charge these fees to make back the interest they could lose when a borrower pays their loan off early.
To determine whether your lender charges prepayment penalties, look over your loan agreement or contact them directly.
If your lender charges prepayment penalties, another option is to refinance your loan. By refinancing your auto loan, you can reduce its interest without additional fees.
For an easy way to explore your refinancing options, use the
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