Bankrate Auto Loan Calculator Payoff With Extra Payments

Loan Payment 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:

Interest Rate:

Loan Term:

years

Extra Monthly Payment:

New Monthly Payment:

Total Interest Paid:

Loan Term With Extra Payments:

Total Savings:

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1. What is the Auto Loan Calculator With Extra Payments?

This calculator shows how making extra payments on your auto loan can save you money on interest and help pay off your loan faster. It uses Bankrate's amortization method to calculate the impact of additional payments.

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: Even small extra payments can significantly reduce total interest paid and shorten the loan term. The earlier you make extra payments, the greater the impact.

4. Using the Calculator

Tips: Enter the loan amount, interest rate, and term. Then add any extra monthly payment you plan to make. The calculator will show your new payment schedule and savings.

5. Frequently Asked Questions (FAQ)

Q1: How much can I save with extra payments?
A: Savings depend on loan amount, interest rate, and how much extra you pay. Even $20-50 extra per month can save hundreds or thousands over the loan term.

Q2: Should I pay extra principal or save the money?
A: Compare your loan interest rate with potential investment returns. If your loan rate is higher, paying it down usually makes more financial sense.

Q3: Do all lenders accept extra payments?
A: Most do, but some may have prepayment penalties or specific instructions for extra payments. Always check with your lender.

Q4: Is it better to make biweekly payments instead?
A: Biweekly payments (half the monthly amount every 2 weeks) result in 26 half-payments or 13 full payments per year, equivalent to one extra monthly payment annually.

Q5: How do I ensure extra payments go toward principal?
A: Specify in writing that additional amounts should be applied to principal. Follow up to verify proper application.