If I have a sixty month auto loan and decide to pay it off forty months early, do I still pay for all of the interest or just the interest paid up to the point of the payoff?
More than likely you have a simple interest loan. This means that interest accrues periodically. This is commonly a daily accrual, so the payoff today is less than it will be tomorrow if no payment is made on your account, so you will only be charged interest for the time you have use of the money. The sooner you pay it back, the less you'll pay.
In years gone by there were many precomputed loans. This meant the interest was somewhat front-loaded and you were charged more in the earlier months than in the latter months of your loan period. It was as even as a simple interest loan. You would still save money with prepayments there, but not as much because of the front-loading.
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More than likely you have a simple interest loan. This means that interest accrues periodically. This is commonly a daily accrual, so the payoff today is less than it will be tomorrow if no payment is made on your 