1. What is an Auto Loan Amortization Calculator?

This calculator shows how making extra payments affects your auto loan payoff date and total interest paid. It generates a detailed amortization schedule showing the breakdown of each payment between principal and interest.

2. How Does the Calculator Work?

The calculator uses these formulas:

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 principal payment

Explanation: Each payment first covers the interest due, then the remainder goes toward principal. Extra payments reduce principal faster, saving interest.

3. Importance of Early Payments

Details: Making extra payments early in the loan term has the greatest impact because more of each payment goes toward interest at the beginning of the loan.

4. Using the Calculator

Tips: Enter your loan details and any planned extra payments. The calculator will show how much interest you'll save and when the loan will be paid off.

5. Frequently Asked Questions (FAQ)

Q1: How do extra payments affect my loan?
A: Extra payments reduce principal faster, saving interest and shortening the loan term.

Q2: When is the best time to make extra payments?
A: Early in the loan term when interest charges are highest.

Q3: Should I refinance or make extra payments?
A: Compare options - sometimes extra payments provide better savings than refinancing.

Q4: Are there prepayment penalties?
A: Most auto loans don't have prepayment penalties, but check your contract.

Q5: How much can I save with extra payments?
A: Significant savings are possible - a $50 extra monthly payment on a $25,000 loan at 5% can save thousands.