@NLYTN wrote:
I was wondering if the first payment made on a new loan usually goes straight to principle or is it still split between principle and interest ?
Depends on the type of loan. Most, but not all, auto loans today are simple interest type loans which means your payment applies to interest first, then principal. The interest is calculated daily so if you make your payment early you are paying less toward interest and more toward principal. http://www.investopedia.com/terms/s/simple_interest.asp
If you want to see the difference in total interest paid over the life of the loan you can go to bankrate.com and play around with the auto payment calculator.
The few loans that aren't simple interest are either rule of 78's or a variation of it. In this terrible type of loan all the interest is due up front before the principal is paid. You don't see these much any more except for some BHPH type financing. Best to stay away from these type of loans. Not good at all.
