What Is a 10-Day Payoff on a Car Loan?

A 10-day payoff represents the precise amount required to fully satisfy a car loan on a specific future date. This figure is crucial when a borrower pays off their loan completely, such as when selling the vehicle or refinancing. It ensures all outstanding principal and accrued interest are covered, preventing any remaining balance after the transaction. Understanding this amount is fundamental for accurately closing out a loan.

Components of a 10-Day Payoff Amount

The 10-day payoff amount is more than just the current principal balance shown on a loan statement. It accounts for the outstanding principal, any interest that has already accrued but not yet been paid, and an estimate of interest that will accrue over a short, defined period. This includes “per diem” interest, the daily interest charge on the loan. Per diem interest covers interest accumulation from the quote issuance date until the specified payoff date, usually 10 days later.

This calculation ensures the loan is fully paid off, even if a few days pass between requesting the quote and making the payment. Because interest accrues daily, the exact payoff amount changes each day. Therefore, the quoted amount is only valid for the specified timeframe, typically ten days from the date it is provided by the lender. Exceeding this period requires a new, updated payoff quote.

Requesting a 10-Day Payoff Quote

Obtaining a 10-day payoff quote typically involves contacting your loan servicer directly. Many lenders offer convenient methods for requesting this information, including through an online account portal, a dedicated phone number for customer service, or by visiting a local branch in person. Borrowers should be prepared to provide specific identifying information.

Lenders require the loan account number, vehicle identification number (VIN), and personal verification details like full name, address, and sometimes the last four digits of their Social Security number. After verifying identity and loan details, the lender will generate a formal payoff quote. This quote specifies the exact amount due and the precise date payment must be received to fully satisfy the loan.

Settling Your Loan with a 10-Day Payoff

Once the 10-day payoff quote is secured, submit the exact quoted amount to the lender within the specified timeframe. Common methods for this final payment include a cashier’s check, a wire transfer, or an electronic payment initiated through the lender’s online portal. Using certified funds, such as a cashier’s check or wire transfer, is recommended as it provides proof of payment and ensures funds are received promptly and cleared by the bank.

Upon successful processing of the payment, the lender will release their lien on the vehicle. This process involves the lender sending a confirmation of the paid-off loan to the borrower and notifying the state Department of Motor Vehicles (DMV) or equivalent agency of the lien release. The vehicle’s title, now free of liens, will be mailed to the borrower or updated electronically, signifying full ownership.