How a lump sum helps
A lump sum reduces your balance straight away, so every later payment pays off more capital and less interest. The calculator keeps your normal monthly payment the same and adds your overpayments, so the loan is paid off sooner. It works month by month, charging interest at one twelfth of the annual rate on what you still owe.
For hire purchase and PCP agreements, a lump sum usually works as a partial settlement rather than a simple overpayment. Ask your lender how they apply it.
Worked example
On £12,000 at 8% with 36 months left, the normal payment is £376.04 a month. A £2,000 lump sum now saves £492.91 in interest and clears the loan 6 months sooner.
A £1,000 lump sum saves £260.04 and 3 months. A £4,000 lump sum saves £881.16 and 1 year.
Settling early
You can usually settle car finance early by paying the settlement figure. Ask the lender for it, and check for any early repayment charge.
Inputs for the car loan lump sum calculator
Amount you owe
The balance left on your car loan.
Interest rate (per year)
Your current interest rate.
Time left to repay
How many months are left on the loan.
Extra each month
The amount you'll pay on top of your normal payment each month. Enter 0 for none.
One-off lump sum now
A single overpayment made now. Enter 0 for none.
CALCULATOR QUESTIONS
Car loan lump sum calculator questions
Can I pay a lump sum off my car loan?
Usually. For HP and PCP it often works through a partial settlement. Ask your lender.
How much would £2,000 save?
On £12,000 at 8% with 36 months left, £492.91 and 6 months.
Will a lump sum lower my payment or shorten my loan?
It depends on your lender. This calculator shows the loan shortening with the same payment.
Will my lender charge me for overpaying?
It depends on your agreement. Check for early repayment or settlement charges before you overpay.