1. What is the Auto Loan Extra Payment Calculator?

This calculator shows how making extra payments on your auto loan can save you money on interest and shorten your loan term. It generates an amortization schedule that breaks down each payment into principal and interest portions.

2. How Does the Calculator Work?

The calculator uses standard amortization formulas with adjustments for extra payments:

Where:

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

3. Benefits of Extra Payments

Details: Even small extra payments can significantly reduce total interest paid and shorten the loan term. This calculator helps visualize these savings.

4. Using the Calculator

Tips: Enter your loan details and any planned extra payments. 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: Savings depend on your loan amount, interest rate, and how much extra you pay. Even $20-50 extra per month can save hundreds in interest.

Q2: Should I pay extra principal or invest?
A: Compare your loan interest rate to potential investment returns. Paying off high-interest debt usually offers better guaranteed returns.

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

Q4: When do extra payments have the most impact?
A: Extra payments early in the loan term save the most interest since more of each payment goes toward interest initially.

Q5: Can I make irregular extra payments?
A: Yes, but this calculator assumes consistent extra payments. For irregular payments, you'd need to recalculate after each change.