Payoff amount? Contact your loan servicer for the exact payoff figure. The payoff amount includes the remaining principal balance plus per diem (daily) interest and any applicable fees. It is always higher than the remaining balance.
How To Get Your Payoff Amount
Request a payoff statement from your loan servicer. This can typically be done online, by phone, or by mail. The servicer calculates the amount needed to pay off the loan in full as of a specific date. Payoff quotes are usually valid for a limited time, often 10 to 30 days.
When you refinance or sell your home, the title company or closing agent will order the payoff statement as part of the closing process. You do not need to request it yourself, but you should review it for accuracy.
Understanding Per Diem Interest
Per diem interest is the daily interest that accrues between your last payment and the payoff date. Since interest is calculated daily, the payoff amount goes up by roughly 1/365th of your annual interest rate times the remaining balance for each day that passes. A $300,000 balance at 6.5% accrues about $53 in interest per day.
Patrick Kevin Fagan recommends timing your payoff close to your payment due date to minimize per diem interest. If your payment is due on the 1st and you pay off on the 5th, you only pay 5 days of interest instead of 25.
