Can you pay off a car note early without any problems?

Question

I wonder can you pay off a car loan early than the length of contract without any problems like a surcharge or penalty. For example If I get a 48 month term finance on a truck and I make like around less then a 1000 a month (got my parents to co-sign). and later on I get a better job which pay 2K-3K a month and I want to pay off the truck early, will I get any kind of penalty?

Answer 1

You can pay it off anytime you want.... as long as there's no prepayment penalty spelled out in the contract.

But it helps to keep it for at least a year to help build credit.

Answer 2

There are several dynamics in your question that only you know the precise answers to that make your question more than just do I choose 'A' or 'B' First and most important is for you to know exactly what your financial situation is. to make it as brief and simple as possible, you should list what your net monthly income is (after taxes and any other withholdings). Then write down all of your monthly expenses... and I do mean all of them... including what you spend on yourself (entertainment, hobbies, movies, etc). Only once you've done this can you really begin to gain a direction for your answer. Knowing your financial information you can easily find a loan calculator on the web to help you determine what your payments will be on the Aveo vs. what your father is offering (28 payments @ $300 is $8,400 by the way). When you are calculating your payments on the Aveo I wouldn't go over 48 months on this type of low end car. You won't want to have it that long and they aren't known for their durability. The price, however, your father is offering you on his car is pretty much a retail price for a car that has a whole bunch of miles on it... but you know your father and his car, I do not. You mention your job and that you might be changing. Only you know the stability of your working situation and your career. I also don't know anything about your credit or even if you've established any at all. If your new to financing and have never financed much, the interest rate you end up with on the Aveo may be quite high; which means you'll pay much more that $10,000 for the car. Plus, the Aveo down the road will have little to no trade in value, so if you finance it, you'll forever be upside down in the car. The bottom line is that the Aveo will will put you at more of a financial risk simply because you'll be financing it. So, you'll need a higher comfort level of your finances and your job as opposed to going with your father's car. If you've got doubt about your job or have not settled into a career yet, I would go with your father's car. This comes without the financial and credit risk should you get between jobs for a while (assuming your father won't take you to small claims court for missing payments... but only you would have a feel for that). No matter which you choose, the point I'm trying to get across here is that you should be making your decision based on putting your financial situation on paper and crunching the numbers on both sides and be brutally honest with your money habits... and pay less attention on the cars themselves. Best wishes and good luck to you! jeff

Answer 3

I've never seen a pre-payment penalty on an auto loan. The only clause I usually see is that the bank is entitled to make a minimum of $10 for paperwork.

Answer 4

No, there should be no penalty. It may be a good idea for you to pay it off early and save or invest that money for other purposes like buying property, etc.

Answer 5

check your contract most of the time no you wont get any penalty but it depends on who financed the car i have done this and had no penalty but i made sure it was in my contract first

Answer 6

Don't know. Read your contract and/or call the Finance Company. Good luck.

Answer 7

You would have to look at your sales contract to see if there is an early payoff penalty.

Answer 8

You shouldn't have a problem, but you might want to call the finance company

Answer 9

you can pay it off whenever, but if you want to build your credit, it's better to take more time. only problem is you still have to pay the intrest of the contract you signed. you don't pay less intrest.

Answer 10

yes you can pay it off and they wont make you pay any fees or anything else,all it does it build your credit up really good ,but paying it off wont cost you no more,actually it will save you a few bucks on interest,good luck with it,i hope this help,s.