1. What is a Car Loan Amortization Calculator?

This calculator shows how making extra payments affects your car loan. It calculates your monthly payment, total interest, and how much time and money you can save by paying extra each month.

2. How Does the Calculator Work?

The calculator uses the amortization formulas:

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
• \( extra \) — Additional payment amount

3. Benefits of Extra Payments

Details: Making extra payments reduces the principal faster, which decreases total interest paid and shortens the loan term. Even small additional amounts can lead to significant savings over time.

4. Using the Calculator

Tips: Enter your loan amount, interest rate, and term. Then specify any additional monthly payment you plan to make. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How much can I save with extra payments?
A: Savings depend on loan amount, interest rate, and extra payment amount. Even $50 extra per month can save thousands in interest.

Q2: Should I pay extra principal or invest?
A: Compare loan interest rate with potential investment returns. Paying off higher-interest debt usually makes more financial sense.

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

Q4: When is the best time to make extra payments?
A: Earlier payments save more interest since more of your payment goes toward principal reduction.

Q5: How do I make sure extra goes to principal?
A: Contact your lender to confirm their process - some require special instructions for principal-only payments.