Is there any kind of penalty for paying off a loan early?

 

Some loans there are, some not. You'll have to find out yourself on that one. I know on mine, there isn't.

 

Alright, thanks for the info!

 

On 99% of them, there is'nt.
just call the company to be sure though.

 

If it is a "simple" loan there is no penalty for early payoff.

 

If your loan is through Ford Motor Credit there is NO penalty.

 

Call for a payoff amount, heh

 

There may be a 'hidden penalty' even where no penalty exists.

Look for verbage that states 'Rule of the 78's''.

A loan that uses the 'Rule of the 78s' insures that the lender makes some scratch if you pay off early. Banks and loan companies, used to compute this way. Don't know if they still do.

Example borrow, $10,000 and before the first payment is due, you payoff the loan. The payoff would be about $10,700.

"Also referred to as the sum of the digits, a mathematical formula used to determine the interest rebate when a borrower pays off a loan before maturity. The process is applied primarily to consumer loans in that the finance charges are computer using the add-on interest or discounted interest method. The determination of interest paid within each month is as follows: first, add up the number of months over that payments are to be made, then divide that total figure into the numbered payment in reverse order, for example, for a 12-month installment loan the sum of the payment months (i.e., 1 through 12) equals 78. For the first month's interest, divide this number into the month number in reverse order, i.e., 12/78 of the total interest payable; for the second month, 11/78, and so on."

 

[QUOTE]Originally posted by Raoul
There may be a 'hidden penalty' even where no penalty exists. Look for verbage that states 'Rule of the 78's''./QUOTE]

When presented with this "Rule of 78's" by lenders, I have responded with my own "Rule of Suck My Crank (if you think I'm going to pay that)"