Why did I get charged extra interest after paying off my car loan early?
Lenders often require a multi-day payoff quote to process transactions, but they may still collect interest for the entire buffer period even if the funds are withdrawn immediately. This discrepancy leaves borrowers confused about unexpected extra charges that do not match their daily interest calculations.
What people tried
Every workaround mentioned in the threads below. We haven’t tested any of them — and nobody here is claiming they worked.
- 1Accepting the 10-day payoff quote amount as standard practice for processing time
- 2Calling the lender to question or dispute the extra amount collected
- 3Making larger-than-required payments
- 4Checking loan agreements or calling the lender
In their words
Unedited, most upvoted first, each linked to the thread it came from.
“All that being said, we ended up paying about $100 more in “interest” because they used such a long payoff timeframe. Is that normal?”source ↗
“According to the finance website, we only had interest of 38.14 charged, which makes sense because my math says is about $10/day and we had the loan 4 days. But why did they withdraw an extra 95.35?”source ↗
“I understand that, and I assumed it would take the 10 days but they literally pulled the money out same day. It’s gone from my account.”source ↗
“But why? Why is that the correct amount? Their website literally says principal, interest, fees, etc and it’s $95 different from the amount we had to pay. I don’t understand how that’s the correct amount to pay on day 4.”source ↗
“im currently financing a car w/ JUST under 3k left to pay and have been considering just paying it all off, however ive been holding back because i want to go about it the smartest way possible.”source ↗
“my two main concerns are a) unexpected fees or payments (including interest) after paying the entire principal amount and b) the impact it’ll have on my credit score”source ↗
Where this came up
People with this problem also raised
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- 5Should I use my savings to pay off student loans?