Auto Loan Calculator With Principal Payment

Amortization Formula:

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

Loan Amount:

Annual Interest Rate:

Loan Term:

months

Extra Principal Payment:

Monthly Payment:

Total Interest:

Total Cost:

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What is an Auto Loan Calculator With Principal Payment?

This calculator shows how making extra principal payments on your auto loan can reduce your total interest paid and shorten your loan term. It provides a detailed amortization schedule showing the impact of additional payments.

2. How Does the Calculator Work?

The calculator uses standard amortization 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 in period k
\( Principal_k \) — Principal portion of payment in period k
\( Balance_k \) — Remaining balance after period k
\( r \) — Monthly interest rate (annual rate ÷ 12)
\( PMT \) — Regular monthly payment
\( extra \) — Additional principal payment

3. Importance of Extra Principal Payments

Details: Making extra principal payments reduces the outstanding balance faster, which decreases the total interest paid over the life of the loan and can significantly shorten the loan term.

4. Using the Calculator

Tips: Enter your loan amount, interest rate, and term. Add any extra principal payment you plan to make regularly. The calculator will show your amortization schedule and total savings.

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 reduce your loan term by months or years.

Q2: When is the best time to make extra payments?
A: The earlier you make extra payments, the more you'll save, but any time helps reduce total interest.

Q3: Should I refinance or make extra payments?
A: Compare options - sometimes extra payments on a higher rate loan save more than refinancing costs.

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

Q5: How do I make sure extra goes to principal?
A: Specify with your lender that the extra payment should be applied to principal, not future payments.