1. What is the Additional Payment Car Loan Calculator?

This calculator determines the remaining balance on a car loan when making additional payments, helping borrowers understand how extra payments affect their loan payoff timeline and total interest paid.

2. How Does the Calculator Work?

The calculator uses the remaining balance formula:

Where:

• \( RB \) — Remaining balance ($)
• \( PMT \) — Monthly payment amount ($)
• \( r \) — Monthly interest rate (decimal)
• \( m \) — Number of remaining payment periods

Explanation: The formula calculates the present value of the remaining loan payments, showing how much principal is left to pay.

3. Importance of Calculating Remaining Balance

Details: Knowing your remaining balance helps when refinancing, selling your car, or making additional payments to pay off the loan faster and save on interest.

4. Using the Calculator

Tips: Enter your regular monthly payment, monthly interest rate (annual rate ÷ 12), and how many payments remain. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How do additional payments affect my loan?
A: Extra payments reduce principal faster, decreasing total interest paid and potentially shortening the loan term.

Q2: Should I specify additional payments go toward principal?
A: Yes, always request additional payments be applied to principal to maximize interest savings.

Q3: How do I find my monthly interest rate?
A: Divide your annual percentage rate (APR) by 12 (e.g., 6% APR = 0.06/12 = 0.005 monthly rate).

Q4: Why does my remaining balance seem high?
A: Early in the loan, most payments go toward interest rather than principal.

Q5: Can this calculator show total interest savings?
A: This version calculates remaining balance only. For interest savings, you'd need to compare with and without additional payments.