Trappe, Maryland; Town: Motto(s): 19th Century Charm - 21st Century Progress Location of Trappe, Maryland: Coordinates: Coordinates: Country United States: State Maryland: County: Talbot
When buying new cars, if you ignore our advice and you trade in a used car which you still owe money on, insist that the dealer put in writing that they will pay off your car loan in 10 days or no deal. Then the dealer is liable because you took steps to protect your rights up front.
There are dangers associated with paying off a car loan early. The loan rate is based on the retirement of the debt over time, usually between 36 to 60 months. This calculation takes into account the amount of interest that the lender will earn during the loan period. You could save yourself a great deal of money by paying the loan off early, however you need to consider that if you take $12,000 out of an account that is generating interest in order to pay your car off early you lose any interest that would have been gained while that money sat in the bank.