Why is payoff amount different than the balance of my auto loan?

If you choose to pay off your auto loan in full, you may notice that the payoff amount is different (higher) than the balance of the loan from your last statement.

First of all, congratulations! You’re about to pay off your auto loan, which is definitely cause for celebration.

Secondly, it is normal for the payoff amount for an auto loan to be higher than the balance. A payoff amount for a simple-interest loan, like many auto loans, will be higher than the balance due to the interest that has accrued since your last statement.

In addition, you may be charged a prepayment penalty by your lender if you choose to pay off the loan within a specified time period.

Be sure to check the terms and conditions of your loan before attempting to pay it off in full. You should be able to discover any fees or penalties that may apply.