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Principal-Only Payments

Learn How to Save Money By Paying Off Your Vehicle Loan Early

At Toyota Financial Services (TFS), it’s important to us that you’re always in the driver’s seat when it comes to managing your finances and getting the most from your budget. That’s why we want you to be fully aware of your options when it comes to paying off your loan.  

Your TFS loan is a simple interest loan which means the finance charges you pay each month are calculated based on the unpaid principal balance. Your regular monthly payment amount will first be applied to any finance charges that have accrued since the last payment was received. Then, the remaining portion will be applied to the principal, in accordance with the terms of your contract. 


If you make your regular payment each month by the due date, the balance due at the end of your loan term will be zero (assuming no other miscellaneous fees are incurred).  

However, if you are able to make more than your monthly payment each month in the form of principal-only payments, you will pay down your principal balance faster and decrease the total interest paid over the life of the loan, saving you money in the long run. Of course, this assumes no late or insufficient payments which could potentially increase the interest you owe. 

How to Make A Principal-Only Payment 

The TFS app and website make it easy to make a principal-only payment with a current account. First, log in to your account, then from the Make One-Time Payment page, select “Make Principal-Only Payment,” and follow the instructions.   

By mail, simply send a check with your account number and ‘Principal Only’ written on the memo line. Our address is: Toyota Financial Services PO Box 22171 Tempe, AZ 85285.  

Learn more about your options by visiting the principal reduction page

Helping you stay money-smart is as important to us as helping you find your perfect new Toyota. We’re here 24/7, and we’re happy to answer any questions you have. Visit the Contact Us page to reach out. 

The information in this blog is offered for informational purposes only. Any product names, logos, brands, images, and other trademarks featured or referred to within the Toyota Financial Services (TFS) website are the property of their respective trademark holders. These trademark holders are not affiliated with TFS and do not sponsor or endorse TFS, or any of its respective websites, products, or comments unless otherwise disclosed. TFS declares no affiliation, sponsorship, nor any partnerships with any registered trademarks unless otherwise disclosed. By clicking on a hyperlink contained within this blog, you may be directed to a third-party website and will be subject to the terms of that website, including those relating to confidentiality, data privacy and security.

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