Auto loan calculation

[ridgebackpilot]

---

@Roadgeek395 wrote:

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 don't understand why you want to make an additional payment? If you want to save money, why don't you just refinance your auto loan and get a lower interest rate? That will save you a lot more than simply making a principal-only payment.

[RSX]

^^ might be to avoid getting a new acct

OP - if you have a solid emerg fund already, then go ahead and make the payment - it will shorten your total term - save you on Interest, and drop the Util % for that loan

i always make extra payments on my loans - and it has worked out well for me

[Kforce]

f you make a payment of $2,500 next month with extra applied to principal

Not all will go to principal, 87.07 would be normal months interest and 2,417.93 for principal credit.

1st month, pmt 2.500, int 87.07, principal=2.417.93, new balance= ~19.863.

Balance $19.863,  52 months , pmt 422.36 @ 4.42% , interest = 1,989

Total interest (1,989+87)=2,076 and (Month 1 & 52 more) = 53 months

Normal remaining interest would be 2539.30

With 2500 as first additional pmt ~2,076 interest

You would save ~ 463 dollars

It will take a total of 53 months

Same as full 22.281 @ 3.697% interest and 422.36/mo

[Roadgeek395]

---

@ridgebackpilot wrote:

---

@Roadgeek395 wrote:

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 don't understand why you want to make an additional payment? If you want to save money, why don't you just refinance your auto loan and get a lower interest rate? That will save you a lot more than simply making a principal-only payment.

---

I just recently refinanced. That's why I'm looking for other methods to save on interest.

[Roadgeek395]

---

@RSX wrote:

^^ might be to avoid getting a new acct

OP - if you have a solid emerg fund already, then go ahead and make the payment - it will shorten your total term - save you on Interest, and drop the Util % for that loan

i always make extra payments on my loans - and it has worked out well for me

---

That's what I was thinking as well but I seem to be getting mixed responses 

[Roadgeek395]

---

@Kforce wrote:

f you make a payment of $2,500 next month with extra applied to principal

Not all will go to principal, 87.07 would be normal months interest and 2,417.93 for principal credit.

1st month, pmt 2.500, int 87.07, principal=2.417.93, new balance= ~19.863.

Balance $19.863,  52 months , pmt 422.36 @ 4.42% , interest = 1,989

Total interest (1,989+87)=2,076 and (Month 1 & 52 more) = 53 months

Normal remaining interest would be 2539.30

With 2500 as first additional pmt ~2,076 interest

You would save ~ 463 dollars

It will take a total of 53 months

Same as full 22.281 @ 3.697% interest and 422.36/mo

---

Thank you for the breakdown on the math! If I make an extra $2500 payment it will be after I make my regular monthy payment. I have the option with my lender to make a principal only payment.

[Kforce]

No strings. ideal numbers, above was worst case normal payment replacement..

$22.281 @ 4.42% & $422.36/mo = interest loss of $2,539.30

- 2500

$19,781 @ 4.42% & $422.36/mo = interest loss of $1.972.02

Savings $567.28 // 52 months of normal payments remaining

Others are correct current loan has 59 months left !

[Kforce]

---

@Shooting-For-800 wrote:

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

---

The math is :

Interest lost with $22,300  @- 4.42% with 422.36/mo payments

vs

Interest lost with $19.781 @ 4.42% with 422.36/mo payments

[Roadgeek395]

---

@Kforce wrote:

No strings. ideal numbers, above was worst case normal payment replacement..

$22.281 @ 4.42% & $422.36/mo = interest loss of $2,539.30

- 2500

$19,781 @ 4.42% & $422.36/mo = interest loss of $1.972.02

Savings $567.28 // 52 months of normal payments remaining

Others are correct current loan has 59 months left !

---

I just realized right now I made a typo in my original post! I still owe 21,281 NOT 22,281 sorry for the confusion! I was wondering why a couple people were saying 59 months remaining, sorry!!

Now with the accurate numbers, and 50 months remaining after the extra payments, what would my savings be?

---

[incognitony]

The numbers will be roughly the same as you are still dropping about 7 months off the loan. Kforce will probably get us the answer but roughly  saving you $10-20 less than the original figures.