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Started By
Message
Need some help with efficiency of paying off car loan
Posted on 3/22/13 at 8:51 am
Posted on 3/22/13 at 8:51 am
have a 48-month note at $312/month
if i pay the $312, I will have paid approximately $950 in interest over the term
looking for some equations to see if I add x dollars to the payment, how much will y interest be decreased over the term.
thanks so much
if i pay the $312, I will have paid approximately $950 in interest over the term
looking for some equations to see if I add x dollars to the payment, how much will y interest be decreased over the term.
thanks so much
3
Posted on 3/22/13 at 8:53 am to Rouge
The Microsoft Excel financial function on interest paid should do it for you.
Posted on 3/22/13 at 8:54 am to Rouge
Bankrate.com
Posted on 3/22/13 at 8:59 am to LSUSUPERSTAR
quote:Even better than Excel.
Bankrate.com
Posted on 3/22/13 at 9:06 am to LSURussian
thanks so much
paying an extra $50/month on the loan will only cut $140 off my interest over the term
dont believe time value of money makes it worth the extra monthly payment
paying an extra $50/month on the loan will only cut $140 off my interest over the term
dont believe time value of money makes it worth the extra monthly payment
Posted on 3/22/13 at 9:13 am to Rouge
quote:
dont believe time value of money makes it worth the extra monthly payment
You're going to the trouble of figuring out the $s of interest the extra payment will save, but you are willing to "believe" it is not worth it without figuring out how much money you'll make putting that $50 in savings, mutual funds, CD, etc.?
That $140 is real, but the principal is real, too. If you don't put the $50 towards the car, what are you spending it on? Pizza? Call of Duty? Drugs?
This analysis seems penny wise and pound foolish.
Posted on 3/22/13 at 9:17 am to Rouge
Your figures sound about right.
You can always estimate the interest savings on any simple interest loan, which you probably have.
If you increase the payment each month by 10%, your total interest savings will be approximately 10%. It's never exact.
In your case, if you increase your payment by $50 (16%, rounded) you will reduce your total interest paid by 15%, rounded.
You can always estimate the interest savings on any simple interest loan, which you probably have.
If you increase the payment each month by 10%, your total interest savings will be approximately 10%. It's never exact.
In your case, if you increase your payment by $50 (16%, rounded) you will reduce your total interest paid by 15%, rounded.
Posted on 3/22/13 at 9:33 am to Ace Midnight
the extra $50 will go towards other debt.
Posted on 3/22/13 at 9:39 am to Rouge
quote:
the extra $50 will go towards other debt.
If you're min-maxing, you always go towards the higher interest rate - if you're using Ramsey's debt snowball, you should pay the smallest balance off. In any event, good luck.
This post was edited on 3/22/13 at 9:40 am
Posted on 3/22/13 at 10:52 am to Rouge
How much is your "play" money each month after everything else is paid? Whatever it is, cut it in half and use the other half as an extra payment each month.
Or if you really want to get serious about it, use all of your play money.
I have a 60 month note for $368/month that I pay $1,300 extra a month on. I got the car two years ago but just got serious about paying extra on it about 6 months ago. It will be paid off in less than a month
Or if you really want to get serious about it, use all of your play money.
I have a 60 month note for $368/month that I pay $1,300 extra a month on. I got the car two years ago but just got serious about paying extra on it about 6 months ago. It will be paid off in less than a month
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