Saving up to pay off your auto loan early may require time and dedication. Fortunately, the actual payoff process is fast and simple. When you purchased the vehicle, all haggling and negotiating was done before signing on the dotted line. Now that you have agreed to a price, you don't have to worry about striking a deal with the bank. Most finance companies offer several convenient ways for you to get your current payoff balance.
Requesting the Payoff Amount
Contact your finance company to request the payoff amount. Some companies have automated systems allowing you to get payoff amounts 24 hours a day by entering your account or Social Security number. You may also find payoff information online. For example, Toyota finance customers can receive current payoff quotes by accessing their accounts and clicking "Payoff Information." The balances are typically updated daily and quotes may be good for several days.
Negotiating the Balance
If you don't agree with the payoff balance or need clarification, contact the finance company directly. The bank may agree to bargain somewhat, but ultimately your contract dictates the amount of room you have to negotiate. With a simple interest loan, an early payoff saves you the most because interest is added as you go along. Although rare, some banks still use precomputed interest loans, which require all interest you would accrue for the entire loan length. Your bank may offer a payout with the principal plus a fee. Compare the early payoff amount to what you would pay if you continued your normal payment schedule.
Making the Payment
Most finance companies require you to mail payoff checks or money orders. Some banks may allow you to make a payment online using a credit or debit card once you have obtained the exact payoff amount. To expedite the payoff process, consider mailing a certified check or guaranteed funds via overnight mail. Your finance company may have a different address strictly for accepting overnight payments. If you are enrolled in an automatic payment service, cancel after paying off the loan to ensure against additional payments.
After your payment clears and posts to your account, the title is generally mailed directly to your address on record. If the payment was made with guaranteed funds, the process can take a few business days. With other payment methods, it may take up to 30 days. Your state's title transfer process can also affect how long it takes to receive the title. Some states process titles electronically, resulting in a faster turnaround time.
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