Reply
Established Member
Posts: 13
Registered: ‎03-15-2011
0

Is 2.29% really 2.29%

Hi all,

 

I just purchased a new car and received a 2.29% interest rate from the bank.  My question, does the 2.29% really equate to that? 

 

Loan Amt: 45573.76

Interest Rate: 2.29%

Terms 60 months

 

Bank says my pmt will be $805.35

 

My number crunching came up with $804.60  why is there a diifetrence?  Anyone know ?

 

I used Excel to get my monthly payment of $804.60.   The banks number is $805.35  which equates to around 2.33%

 

 

 

Regular Contributor
Posts: 154
Registered: ‎09-21-2012
0

Re: Is 2.29% really 2.29%

Are you compounding interest monthly or yearly, my guess is yearly :smileywink:

Age: 22 //Cards: Chase Freedom, Chase Amazon Visa, Discover IT, CreditOne, CapOne Quicksilver, CapOne Cash, Walmart, Barclaycard, Citibank BestBuy, NavyFederal Visa Signature cashRewards //AAoA: 1 Year 3 Months (but going down quickly :smileytongue:) //CK:692, Sesame:656
Established Member
Posts: 13
Registered: ‎03-15-2011
0

Re: Is 2.29% really 2.29%

Correct Yearly

Regular Contributor
Posts: 154
Registered: ‎09-21-2012
0

Re: Is 2.29% really 2.29%

Ok im wayyy too lazy to break out the calculator but calculating it yearly will not accurately break down your interest paid. On a month to month basis if interest is charged at the yearly rate divided by the number of months charge that amount will be greater than the sum of the payments for the year times the interest for the entire yea.....i think. LOL

 

So basically because you make monthly payments instead of one BIG payment yearly you end up paying a fraction more in interest.

Age: 22 //Cards: Chase Freedom, Chase Amazon Visa, Discover IT, CreditOne, CapOne Quicksilver, CapOne Cash, Walmart, Barclaycard, Citibank BestBuy, NavyFederal Visa Signature cashRewards //AAoA: 1 Year 3 Months (but going down quickly :smileytongue:) //CK:692, Sesame:656
Regular Contributor
Posts: 154
Registered: ‎09-21-2012
0

Re: Is 2.29% really 2.29%

The 2.29 is the APR, APY which accounts for the amount of time interest is applied is more.

 

Look up APY vs APR in google for a much better explaination than I can give :smileyvery-happy:

Age: 22 //Cards: Chase Freedom, Chase Amazon Visa, Discover IT, CreditOne, CapOne Quicksilver, CapOne Cash, Walmart, Barclaycard, Citibank BestBuy, NavyFederal Visa Signature cashRewards //AAoA: 1 Year 3 Months (but going down quickly :smileytongue:) //CK:692, Sesame:656
Established Member
Posts: 13
Registered: ‎03-15-2011
0

Re: Is 2.29% really 2.29%

It's definitely an APR of 2.29%.  I've used every calculator tool  for auto loans I could find and they all say 804.60  I used the banks calculator and it came out to 805 they don't show cents.  So I called the bank and the loan officer could only say that  monthly is $805.35 an my APR was 2.29%.  She couldn't tell me how they got that number.  I said that's a rate closer to 2.33%.  She had no answers.  This seems a bit strange to me. What can I do now?

Regular Contributor
Posts: 154
Registered: ‎09-21-2012
0

Re: Is 2.29% really 2.29%

Ok let me try again.

 

Yes the 2.29 is the APR. APR means that the standard yearly rate if you were to make ONE yearly payment you would pay 2.29% in interest. You pay monthly, not yearly. Therefore the APY (the real interest rate for your loan) is HIGHER.

Age: 22 //Cards: Chase Freedom, Chase Amazon Visa, Discover IT, CreditOne, CapOne Quicksilver, CapOne Cash, Walmart, Barclaycard, Citibank BestBuy, NavyFederal Visa Signature cashRewards //AAoA: 1 Year 3 Months (but going down quickly :smileytongue:) //CK:692, Sesame:656
Established Member
Posts: 13
Registered: ‎03-15-2011
0

Re: Is 2.29% really 2.29%

I understand better.  Thanks for clearing that up.  I'm reading more abotu it now.  Thank you

Regular Contributor
Posts: 154
Registered: ‎09-21-2012
0

Re: Is 2.29% really 2.29%

No problem man, congratz on getting 2.29% !!!

Age: 22 //Cards: Chase Freedom, Chase Amazon Visa, Discover IT, CreditOne, CapOne Quicksilver, CapOne Cash, Walmart, Barclaycard, Citibank BestBuy, NavyFederal Visa Signature cashRewards //AAoA: 1 Year 3 Months (but going down quickly :smileytongue:) //CK:692, Sesame:656
Valued Contributor
Posts: 3,099
Registered: ‎10-02-2012
0

Re: Is 2.29% really 2.29%

I am getting the same 804.60 as you. Seems like your bank is milking an extra $1 out of you and hoping you won't notice.

 

If you make even $1000 payments. You will pay off your loan 1 year sooner and save about $550 in interest.

Too many INQs & low AAoA so I'm off to tend the Garden.     Age:23    


     $17k       $8.5K          Closed          $19k      $6.5k        $24.2k        Closed         $5k       Closed     $8.5k        Closed      @2.49%
Advertiser Disclosure: The listings that appear on myFICO are from companies from which myFICO receives compensation, which may impact how and where products appear on myFICO (including, for example, the order in which they appear). myFICO does not review or include all companies or all available products.
† Credit cards for FICO Score ranges: The score ranges are guidelines based on actual applicant approvals and having a FICO Score in a particular range does not guarantee you will be approved for credit cards recommended in that range.

Copyright ©2001-2015 Fair Isaac Corporation. All rights reserved.   | Terms of Use | Privacy Policy | Sitemap

IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more

FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.