Part of our guide: Motorcycle Courier Insurance 2026: Honest Costs & Best Cover

Here is how to calculate your 10-day payoff amount on a standard simple-interest auto loan: multiply your current principal balance by your APR, divide by 365 to get your daily interest (per diem), multiply that by the number of days until payment posts, and add it to your balance. In one line:

10-day payoff = current principal balance + (balance × APR ÷ 365 × days)

That gives you an estimate accurate to within a dollar or two on most auto loans. It will not match your lender’s figure exactly, and this guide explains precisely why — including the one type of loan where the formula does not apply at all.

For what the document itself is and why the number differs from your balance, see our main guide: What Is a 10-Day Payoff?

What You Need to Calculate It

Input	Where to find it	Common mistake
Current principal balance	Online account, or the “principal balance” line on your statement	Using “current balance” or “payoff balance,” which may already include interest
APR	Your loan contract, or the Truth in Lending disclosure	Using the interest rate when the loan has fees baked into APR, or vice versa
Days	From today (or the last payment posting date) to the date your payment will actually clear	Counting business days instead of calendar days
Pending items	Recent payments, late fees, returned-payment fees not yet posted	Ignoring them entirely

How to Calculate Your 10-Day Payoff Amount in 4 Steps

Step 1: Find your daily interest rate

Divide your APR by 365.

Daily rate = APR ÷ 365

At 6.9% APR: 0.069 ÷ 365 = 0.000189 (about 0.0189% per day)

Some lenders divide by 360 instead of 365. It is a small difference, but it is one reason your figure can be a few cents off. If your letter shows a per-diem amount, you can work backward to see which divisor your lender uses.

Step 2: Calculate your per diem

Multiply the daily rate by your principal balance.

Per diem = principal balance × (APR ÷ 365)

On an $18,450 balance at 6.9% APR: 18,450 × 0.000189 = $3.49 per day

Per diem is the single most useful number in this whole calculation. It tells you exactly what each extra day of delay costs.

Step 3: Multiply by the number of days

Interest to add = per diem × days

$3.49 × 10 days = $34.88

Count calendar days, not business days, and count to the day your payment will actually post — not the day you mail it.

Step 4: Add it to your balance

10-day payoff = principal balance + interest to add

$18,450 + $34.88 = $18,484.88

That is your estimated 10-day payoff amount.

Worked Example

Line	Value
Principal balance	$18,450.00
APR	6.9%
Daily rate (0.069 ÷ 365)	0.000189
Per diem (18,450 × 0.000189)	$3.49
Days until payment posts	10
Interest for 10 days ($3.49 × 10)	$34.88
Estimated 10-day payoff	$18,484.88

If the payment slipped to day 14 instead, you would add four more days of per diem: $3.49 × 4 = $13.96, for a payoff of $18,498.84.

Per-Diem Reference Table

Daily interest on a simple-interest loan, by balance and APR. Multiply by 10 for a rough 10-day figure.

Balance	4% APR	6% APR	8% APR	10% APR	12% APR
$10,000	$1.10	$1.64	$2.19	$2.74	$3.29
$15,000	$1.64	$2.47	$3.29	$4.11	$4.93
$20,000	$2.19	$3.29	$4.38	$5.48	$6.58
$25,000	$2.74	$4.11	$5.48	$6.85	$8.22
$30,000	$3.29	$4.93	$6.58	$8.22	$9.86

The practical takeaway: on a typical $25,000 balance at 8%, every day of delay costs about $5.48. A payoff check that sits in the mail over a long weekend costs roughly $22.

First, Check Which Interest Type Your Loan Uses

This is the step almost every article on this topic skips, and it decides whether the formula above is valid for you.

The Consumer Financial Protection Bureau draws the distinction clearly:

Simple interest “calculates the interest based on the outstanding balance of the loan either on a daily or monthly basis.” Interest accrues as you go. Pay early, pay less. The CFPB notes this type is “far more common.”
Precomputed interest means “the interest is added to your principal at the beginning of your loan and then split into monthly payments.” Here, “making extra payments does not reduce the principal amount (or interest) owed.” Instead, “you may get a refund of some ‘unearned’ interest.”

The formula in this guide is a simple-interest formula. If your loan is precomputed, the per-diem math will not produce your payoff.

How to tell which you have: check your loan contract and your Truth in Lending disclosure. Precomputed contracts typically use language about a “rebate of unearned finance charge” or name a specific rebate method. If the contract talks about interest accruing daily on the unpaid balance, it is simple interest.

How to Calculate Your 10-Day Payoff Amount on a Precomputed Interest Loan

Short answer: you generally cannot calculate it yourself with any precision, and you should not try to.

On a precomputed loan, the payoff is the total of remaining scheduled payments minus a rebate of unearned finance charge, calculated by whatever method your contract specifies. You need the contract’s rebate method, the exact number of remaining scheduled payments, and the precise rebate formula — and the result is not a daily-interest calculation.

What you can do is understand the rules that constrain it.

Federal law limits how unfavorable that rebate method can be. Under 15 U.S.C. § 1615, for precomputed consumer credit transactions with a term exceeding 61 months consummated after 30 September 1993, “the creditor shall compute the refund based on a method which is at least as favorable to the consumer as the actuarial method.” In practice this rules out the Rule of 78s — a rebate method that front-loads interest and leaves early payers worse off — on those longer-term loans.

Note the limit carefully: that statutory protection is tied to terms over 61 months. A shorter precomputed loan is not covered by that particular provision, so the rebate method in your own contract, plus your state’s law, governs.

What to do if your loan is precomputed: request the payoff quote from your lender and treat their figure as the number. Then read the contract’s rebate clause so you understand what you are being charged. If the figure looks wrong, ask the lender in writing to show the rebate calculation.

Why Your Calculation Will Not Match the Lender’s Exactly

Expect a small gap. These are the usual causes, roughly in order of how much they move the number.

Cause	Typical effect
Fees not yet posted (late fee, returned payment, repair or title fee)	Can be $15–$100+
A scheduled monthly payment posting inside the window	Moves the figure substantially
You used the wrong balance line (current balance vs principal)	Varies
Lender divides by 360 instead of 365	A few cents to under a dollar
Interest accrued since your last payment posted, which you did not count	A few days of per diem
Lender rounds per diem differently	Cents
Prepayment penalty, if your contract has one	Varies

That last one is worth checking. The CFPB is direct: “Your contract and state law will determine whether you can pay off your auto loan early.” Most mainstream lenders do not charge one — Chase states there is “no pre-payment penalty” on its auto loans — but subprime and buy-here-pay-here contracts differ.

Lenders also warn that the quoted figure itself can move. Toyota Financial Services says its payoff quote is “good for 10 days from the date it is provided” but that the amount can change if returned payments or fees post afterward. GM Financial explains why your dashboard number is not the payoff: “Interest charges, fees or other charges applied to your account could create a difference in the two balances. Your payoff balance is ultimately what you owe on your account.”

How to Use Your Calculation Properly

Your number is a check, not a substitute. Three good uses:

Sanity-check the letter. If your estimate is $18,485 and the letter says $18,510, the $25 gap is probably a fee. Ask what it is. If the letter says $19,400, something is wrong — ask for an itemization.
Decide your payment method. Knowing per diem is $3.49 tells you a wire that costs $25 is not worth it to save four days, but a mailed check that risks a two-week delay is a false economy.
Correct a late payoff. If your payment will land five days past the good-through date, per diem × 5 tells you roughly what the shortfall will be before you call.

Do not pay your own calculated figure. Pay the amount on the letter. Underpaying by even a few dollars leaves the loan open, the lien in place, and interest running.

Frequently Asked Questions

What is the formula for a 10-day payoff amount?

Principal balance + (balance × APR ÷ 365 × days). On an $18,450 balance at 6.9% APR, per diem is $3.49, so ten days adds $34.88 for a payoff of $18,484.88. This applies to simple-interest loans.

What is per diem interest on a payoff?

Per diem is the interest that accrues on your loan each day. Calculate it as principal balance × APR ÷ 365. It is the number that tells you what each day of delay costs.

Why is my 10-day payoff higher than my loan balance?

Because it includes interest that will accrue between today and the date your payment posts, plus any unpaid fees. The CFPB explains that a payoff amount includes interest due through your intended payoff date plus “other fees you have been charged and have not yet paid.”

Can I calculate my 10-day payoff without calling my lender?

You can estimate it accurately on a simple-interest loan using the formula above. You cannot produce the official figure — fees and pending items are not visible to you, and lenders and third parties require the letter itself.

Does a 10-day payoff use 365 or 360 days?

Most simple-interest auto lenders use 365. Some use 360, which produces a slightly higher per diem. If your payoff letter shows a per-diem figure, divide it by your daily balance to see which divisor your lender applies.

How do I calculate a 10-day payoff on a precomputed loan?

You generally cannot calculate it accurately yourself. The payoff is remaining scheduled payments minus a rebate of unearned finance charge, computed by the method in your contract. Request the quote from your lender.

Does paying off early save interest?

On a simple-interest loan, yes — you stop paying interest from the day the balance reaches zero. On a precomputed loan the CFPB notes extra payments do not reduce principal or interest, though you may receive a refund of unearned interest.

10-Day Payoff Letter Example: How to Read Every Section
What Is a 10-Day Payoff? — the main guide
What Is APR on a Car Loan? — where the rate in this formula comes from
How to Calculate the Total Cost of a Car Loan
What Is Negative Equity? — when the payoff exceeds the car’s value
When to Refinance a Car Loan and When to Wait

Sources

Calculations in this guide are illustrative examples, not quotes. Your lender’s payoff letter is the authoritative figure. Sources verified August 2026.