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What is a loan payoff?
Nicholas Hinrichsen - Published: September 15, 2023
We noticed that a lot of our clients wonder 'what is a loan payoff' statement. Find below everything you need to know.
The loan payoff is the amount you have to pay to fully pay off the money you owe to the loan company. The loan payoff and your account balance is not exactly the same. The loan payoff includes payoff fees (often around $15) and daily interest also knows as per diem.
If for example your loan payoff is $12,000, your per diem is $1.20 and you plan to send a check in 5 days, the amount you need to write on the check is $12,000 + 5 x $1.20 = $12,006. If you don't send the right amount to the lender, you risk not receiving the vehicle title. The lender will not release the vehicle title unless and until the loan is fully paid off.
When you want to sell your car and you still have an outstanding loan, the buyer will request a loan payoff statement. The statement will include the name or the loan company, your account number, the payoff amount, the payoff data, per diem and the address for the payoff check.
The daily interest / per diem is an important number because it tells you how much the buyer needs to pay on top of the payoff amount should he miss the payoff deadline as illustrated in the example above.undefined
Haven't explored refinancing yet? Take a look at our exhaustive article about all the auto refinance companies and you will realize, WithClutch.com is the only fully digital platform that lets car owners like you do so from the comfort of their own home. No need to set a foot in a bank or credit union. You can lower your rate or get cash in as little as 20 seconds.
Follow three simple steps to refinance your auto loan, get approved in seconds and save thousands in minutes.
If for example your loan payoff is $12,000, your per diem is $1.20 and you plan to send a check in 5 days, the amount you need to write on the check is $12,000 + 5 x $1.20 = $12,006. If you don't send the right amount to the lender, you risk not receiving the vehicle title. The lender will not release the vehicle title unless and until the loan is fully paid off.
When you want to sell your car and you still have an outstanding loan, the buyer will request a loan payoff statement. The statement will include the name or the loan company, your account number, the payoff amount, the payoff data, per diem and the address for the payoff check.
The daily interest / per diem is an important number because it tells you how much the buyer needs to pay on top of the payoff amount should he miss the payoff deadline as illustrated in the example above.undefined
Haven't explored refinancing yet? Take a look at our exhaustive article about all the auto refinance companies and you will realize, WithClutch.com is the only fully digital platform that lets car owners like you do so from the comfort of their own home. No need to set a foot in a bank or credit union. You can lower your rate or get cash in as little as 20 seconds.
Follow three simple steps to refinance your auto loan, get approved in seconds and save thousands in minutes.
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