1. What is a Car Loan Amortization Schedule?

A car loan amortization schedule shows how each payment is split between principal and interest over the life of the loan. With extra payments, you can see how much faster you'll pay off the loan and how much interest you'll save.

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

3. Importance of Extra Payments

Details: Extra payments directly reduce the principal balance, which reduces the total interest paid and shortens the loan term. Even small extra payments can make a significant difference over time.

4. Using the Calculator

Tips: Enter the loan amount, interest rate, loan term in years, and any additional monthly payment you plan to make. The calculator will show your amortization schedule and total interest savings.

5. Frequently Asked Questions (FAQ)

Q1: How much can I save with extra payments?
A: Even $50-100 extra per month can save thousands in interest and shorten your loan by months or years.

Q2: Should I pay extra or invest the money?
A: If your loan interest rate is higher than expected investment returns, paying extra on the loan usually makes more financial sense.

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: Regular extra payments (monthly) have the greatest impact, but even occasional lump sums help.

Q5: Does the calculator account for irregular extra payments?
A: This calculator assumes consistent extra payments. For irregular payments, you'd need a more advanced calculator.