How Long Is a Payoff Quote Good For?
Discover how long a loan payoff quote is valid. Learn why its accuracy is time-sensitive and what steps to take for a successful loan repayment.
A payoff quote provides the precise amount of money needed to fully satisfy a loan obligation on a specific date. This official statement from a lender outlines the total sum required to close out a loan, preventing any further interest accrual or outstanding balance. Borrowers typically request these quotes when they intend to pay off a loan early, sell a property, or refinance an existing debt. It serves as a definitive financial snapshot, ensuring the borrower understands their complete liability.
Validity Period Explained
A payoff quote has a limited validity period, typically ranging from 10 to 30 days. The exact duration can vary by lender and the type of loan. This time constraint exists because interest accrues daily on the outstanding loan balance. The quote accounts for this daily interest, known as “per diem” interest, calculating it up to a specific “good-through” date.
The “good-through” date is a crucial element, indicating the final day on which the quoted amount remains accurate. After this date, the amount required to pay off the loan will increase due to the continued accumulation of daily interest. Any unapplied payments, late fees, or other charges that might arise after the quote’s issuance also contribute to the need for a limited validity period. Therefore, sending the payoff funds must occur on or before this specified date to avoid discrepancies.
Key Details in a Payoff Quote
A comprehensive payoff quote includes several specific financial components that determine the total amount due. It itemizes the remaining principal balance of the loan, which is the original amount borrowed minus payments already applied. The quote also details the accrued interest calculated up to the date the quote was generated.
A payoff quote also specifies the daily interest amount, allowing for additional interest calculation if the payoff occurs after the quote date but before the “good-through” date. Any unapplied payments or credits are also listed, reducing the total amount due. The quote may include additional charges such as late fees, processing fees, or prepayment penalties, if applicable to the loan agreement, all contributing to the final payoff sum.
Requesting a Payoff Quote
Borrowers can typically obtain a payoff quote by contacting their lender directly through various channels. Common methods include calling the lender’s customer service line, accessing an online loan portal, or sending a written request via mail or secure message. Lenders usually require specific information to process the request and ensure the quote is accurate for the correct account.
To facilitate the request, borrowers generally need to provide their loan number, full name, and sometimes the property address if it is a secured loan like a mortgage. The lender will then generate the official payoff statement, which will include all the necessary figures and instructions for remitting the funds. It is important to ensure all provided details are accurate to avoid delays in receiving the quote.
Handling an Expired Quote
If the “good-through” date on a payoff quote passes without the loan being fully paid off, the quote is no longer valid. The amount specified on the expired quote will no longer be sufficient to satisfy the loan obligation due to continued interest accrual and potential additional charges. An expired quote cannot be used to complete the payoff transaction.
In such a situation, the borrower must request a new, updated payoff quote from the lender. This revised quote will reflect the current outstanding balance, including any additional accrued interest since the previous quote expired. Obtaining a new quote is a straightforward process, similar to the initial request, and ensures the correct amount is paid to fully close the loan.