I feel like a dumbass right now, but I can't seem to wrap my mind around this...I'm thinking of selling my truck and have been doing some numbers. When I call the bank, my payoff amount is 16000. However, if I take my monthly payments multiplied by the number of months left in my loan I come up with around 14,300. Can anyone explain this? Why am I stupid right now. Maybe I just don't know enough about auto loans, any advice would be appreciated.

 

You WILL always have a bit more than the current balance to pay if you pay off a loan early, but this sounds really fishy to me. First, if you simply multiplied your monthly payments by the number of months remaining, you're including the interest, and that should not be included, so you should really owe (a lot) less than $14,300. Second, if insurance is somehow included in your monthly payments, that should stop as soon as you are no longer the owner too.

Ask your bank for an amortization schedule for the remaining life of your loan. You need to know what your current balance is and what your monthly payments are funding.

- Jack