Weekly Auto Loan Calculator Amortization

Amortization Formulas:

\[ Interest_k = Balance_{k-1} \times r_w \] \[ Principal_k = PMT_w - Interest_k \] \[ Balance_k = Balance_{k-1} - Principal_k \]

Weekly Payment:

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1. What is Weekly Auto Loan Amortization?

Weekly auto loan amortization is the process of paying off an auto loan with weekly payments where each payment is divided between interest and principal repayment. The amortization schedule shows how each payment affects the loan balance over time.

2. How Does the Calculator Work?

The calculator uses these formulas:

\[ Interest_k = Balance_{k-1} \times r_w \] \[ Principal_k = PMT_w - Interest_k \] \[ Balance_k = Balance_{k-1} - Principal_k \]

Where:

\( Interest_k \) — Interest portion of payment in week k
\( Principal_k \) — Principal portion of payment in week k
\( Balance_k \) — Remaining balance after week k
\( r_w \) — Weekly interest rate (annual rate ÷ 52)
\( PMT_w \) — Weekly payment amount

Explanation: Each payment first covers the interest due, then the remainder goes toward reducing the principal. As the principal decreases, the interest portion of each payment decreases.

3. Importance of Amortization Schedule

Details: Understanding your amortization schedule helps you see how much interest you'll pay over the life of the loan and how extra payments can reduce both the loan term and total interest paid.

4. Using the Calculator

Tips: Enter the total loan amount, annual interest rate, and loan term in weeks. The calculator will show your weekly payment amount and a complete amortization schedule.

5. Frequently Asked Questions (FAQ)

Q1: Why choose weekly payments instead of monthly?
A: Weekly payments can help pay off your loan faster and reduce total interest, as you're making the equivalent of 13 monthly payments per year instead of 12.

Q2: How does the interest calculation work?
A: Interest is calculated on the remaining balance each week using the weekly interest rate (annual rate divided by 52).

Q3: Can I make extra payments?
A: Yes, extra payments directly reduce the principal, which will decrease the total interest paid and may shorten the loan term.

Q4: What happens if I miss a payment?
A: Missed payments may incur late fees and could extend your loan term. The interest will continue to accrue on the outstanding balance.

Q5: Are there prepayment penalties?
A: This depends on your loan agreement. Some lenders charge fees for paying off the loan early, while others don't.