1. What is a Car Loan Amortization Schedule?

An amortization schedule shows how each payment is split between principal and interest over the life of your car loan. With extra payments, you can see how much faster you'll pay off your 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 in month k
• \( Principal_k \) — Principal portion of payment in month k
• \( Balance_k \) — Remaining balance after month k
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( PMT \) — Regular monthly payment
• \( extra \) — Additional principal payment

3. Importance of Extra Payments

Details: Extra payments directly reduce your principal balance, which means you pay less interest over the life of the loan and can pay off your car sooner.

4. Using the Calculator

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

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 shorten your loan term significantly.

Q2: Should I pay extra each month or make lump sum payments?
A: Regular extra payments have a greater impact than occasional lump sums because interest is calculated monthly.

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

Q4: How does the interest rate affect my payments?
A: Higher rates mean more of each payment goes to interest rather than principal, making extra payments even more valuable.

Q5: Can I change my extra payment amount later?
A: Yes, you can adjust extra payments as your financial situation changes.