This is the first loan I've ever had on a car, and up until just now, I didn't know if I would benefit from paying off the loan early. It turns out I have a simple interest loan at 4.99%, and still owe just over $13k. I figure right now I can afford to safely pay $4k off the loan. How can I determine how much money I'll actually save on interest for the remainder of the loan (which has 44 months left)? And will I still be required to make payments equal to the original amount, or will my remaining payments be reduced to reflect the balance? Thanks!
if you paid off $4000 now, you would pay for the next 28.638 months for a total of $9564 if you don't pay off $4000, you would pay for the next 42.547 months for a total of $14210.86
The difference between the two is $4645.65
Thantoz
Member
posted: Feb. 9, 2010 @ 3:22p
shmuey said: And will I still be required to make payments equal to the original amount, or will my remaining payments be reduced to reflect the balance? Thanks!
Your payments will still be the original amount, you'll just have to make them for fewer months.
Thanks for the help guys. I'm young, and my parents failed to mention any loan advice to me. I've switched to bi-weekly payments and am going to make that lump payment as soon as the money transfers over. Now I just need to find a tv to spend all that extra cash on (j/k)
shmuey said: I've switched to bi-weekly payments and am going to make that lump payment as soon as the money transfers over. Hope you didnt pay a "convenience fee" for switching to a bi-weekly payment schedule.
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