Auto loan calculation

[Roadgeek395]

Hey everyone!

Hoping I can get some help with some auto loan calculations. 

I currently owe $22,281 on my auto loan at 4.42% APR with 57 months left. 

Monthly payments are $422.36

I plan on making a $2500 principal only payment. If I understand correctly my monthly payments won't change but I will be able to pay off the loan quicker and pay less interest.

I did some rough calculations and I think I'm gonna save somewhere around $500 in interest over the length of the loan. Can anyone help me confirm that?

Also, what would my APR be equivalent to with that savings?

Thanks in advance!

[Shooting-For-800]

You would only save $250-$300 based on my quick calculation.

I would just try and double up on payments to push out your payment due date.  It is a simple interest loan, so you would still save money on interest while improving your cash flow.

Check with your lender on limits for pushing due dates.

[incognitony]

I calculated it would cut off 7 payments which is roughly 500 savings if you continue to make the normal payments. That worked out to around 3.5% on 22200 balance over 57 months. 

[Shooting-For-800]

Maybe I am wrong but it seems like 

$2500 at 4.43% for 52 months = $2752

$2752 - $2500 = $252

Didn't do the long math

[Roadgeek395]

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@Shooting-For-800 wrote:

You would only save $250-$300 based on my quick calculation.

I would just try and double up on payments to push out your payment due date.  It is a simple interest loan, so you would still save money on interest while improving your cash flow.

Check with your lender on limits for pushing due dates.

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Can you show me how you did the math to find that savings?

How/why would doubling my payments and pushing out my due date be more beneficial?

Or are you saying the savings would be about the same?

[Roadgeek395]

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@incognitony wrote:

I calculated it would cut off 7 payments which is roughly 500 savings if you continue to make the normal payments. That worked out to around 3.5% on 22200 balance over 57 months. 

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That's what I was thinking too, just didn't know if I was doing the math right. 

[Shooting-For-800]

Savings would be similar and keep cash in the bank and give you emergency money breathing room.

People screw up all the time paying extra on homes then not able to make on time payment later down the road.

Just a cautious way to approach paying extra while still saving interest.

[incognitony]

The numbers plugged in a payment calculator says 59 months left. It still reduces 7 months at around 2950 over 52 months.

[Shooting-For-800]

Not sure how you can save more interest than the interest you would pay on the $2500 difference which is not $500.  Again, just quick math on an iPad sitting in bed.  

[incognitony]

It reduces the per diem interest and this assumes all future payments unchanged.

0.302739726×365×4.16666 (50 months)= 460.43