Generally, yes. However, rules about this vary according to state law. Review your disclosures and contract before you agree to purchase the car and enter the loan. These documents will tell you whether there may be a penalty for paying early.

If you find that the loan you received has a high interest rate, you may later be able to refinance for a lower interest rate and payment, prepaying the original loan in full. Ask your bank or credit union about interest rates.

TIP: When you receive your Truth in Lending Act disclosure, review it along with your contract before signing. Look for information about any prepayment penalties, your interest rate, APR and payment amount. If what’s on paper doesn’t not match what the dealer told you, ask for an explanation.