Auto Loan Calculator Amortization Schedule With Extra Payment

Amortization Formula with Extra Payments:

\[ Interest_k = Balance_{k-1} \times r \] \[ Principal_k = PMT + extra - Interest_k \] \[ Balance_k = Balance_{k-1} - Principal_k \]

Loan Amount:

Annual Interest Rate:

Loan Term:

months

Extra Monthly Payment:

Monthly Payment:

Total Interest:

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What is an Auto Loan Amortization Schedule?

An auto loan amortization schedule shows the breakdown of each payment into principal and interest over the life of the loan. With extra payments, it demonstrates how additional payments reduce the loan balance faster and save on total interest.

2. How Does the Calculator Work?

The calculator uses these formulas:

\[ Interest_k = Balance_{k-1} \times r \] \[ Principal_k = PMT + extra - Interest_k \] \[ Balance_k = Balance_{k-1} - Principal_k \]

Where:

\( Interest_k \) — Interest portion of payment k
\( Principal_k \) — Principal portion of payment k
\( Balance_k \) — Remaining balance after payment k
\( r \) — Monthly interest rate (annual rate ÷ 12)
\( PMT \) — Regular monthly payment amount
\( extra \) — Additional payment amount

3. Importance of Extra Payments

Details: Extra payments directly reduce the principal balance, which decreases the amount of interest charged in subsequent periods. This can significantly shorten the loan term and reduce total interest paid.

4. Using the Calculator

Tips: Enter the loan amount, interest rate, loan term in months, and any additional monthly payment you plan to make. The calculator will show your amortization schedule with the extra payments applied.

5. Frequently Asked Questions (FAQ)

Q1: How much can I save with extra payments?
A: Even small extra payments can save hundreds or thousands in interest and shorten your loan term by months or years.

Q2: Should I pay extra principal or invest the money?
A: This depends on your loan interest rate vs. expected investment returns. Paying down debt is a guaranteed return equal to your interest rate.

Q3: Are there prepayment penalties?
A: Most auto loans don't have prepayment penalties, but check your loan agreement to be sure.

Q4: How often should I make extra payments?
A: The more frequent the extra payments, the greater the savings. Monthly extra payments are most common.

Q5: Does the payment go to principal immediately?
A: Yes, extra payments beyond your regular payment typically go directly to principal reduction.