So I'm not too familiar with how paying off an item thats being currently financed. I have a loan taken out for my 09 6r, the amount financed was $4777.82, with a finance charge of $1,706.98, apr of 12.75% (high I know). That total comes out to $6484.80. The total sales price is 7,970.80 and that includes my down payment of $1486. My montly payment is 108.08. Now, if I wanted to "pay off" the entire loan, what amount would I be paying for? Say I've made $1300 in payments already, what total do I subtract that from to figure out how much I owe? Hope I didn't make this so complicated and help would be appreciated!!
Finance question!
- Thread starter 06330i
- Start date
So far you've paid some interest and some principal. The number as of the end of the last period should be on your monthly statement, but it can literally change day-to-day, depending on how they're calculating interest.So I'm not too familiar with how paying off an item thats being currently financed. I have a loan taken out for my 09 6r, the amount financed was $4777.82, with a finance charge of $1,706.98, apr of 12.75% (high I know). That total comes out to $6484.80. The total sales price is 7,970.80 and that includes my down payment of $1486. My montly payment is 108.08. Now, if I wanted to "pay off" the entire loan, what amount would I be paying for? Say I've made $1300 in payments already, what total do I subtract that from to figure out how much I owe? Hope I didn't make this so complicated and help would be appreciated!!
The only certain way to know is call the lender and ask them the payoff amount as of today. Some lenders will have this information on their website if you have an online account with them.
you need to find out what/how much of the payments go towards principal vs. interest. there are loan amortization calculator's on the web you can enter the numbers and see this.
note, if you pay more $ for a payment, then the numbers will change based off what goes towards the pay off. like said above, you can contact the lender for a payoff and it will be good for 30 days or so of that billing cycle.
rule of thumb, pay as much as you can when you can, so you pay less in interest for the life of the loan.
note, if you pay more $ for a payment, then the numbers will change based off what goes towards the pay off. like said above, you can contact the lender for a payoff and it will be good for 30 days or so of that billing cycle.
rule of thumb, pay as much as you can when you can, so you pay less in interest for the life of the loan.
Last edited:
meganiimarie
New Member
As someone already said, your monthly payment includes both principal and interest. Assuming you pay the exact amount every month for the entire loan period then you would end up spending $1,706.98 on interest. However, if you pay $158.08 instead of your payment amount, that extra $50 goes directly to the principal amount and you end up paying no interest on that portion. I did that with my car and it will amaze you how much money you save even by putting an extra $20 on each payment.
That said, I would double check and make sure that your loan doesn't have an early payoff fee. If it does you could pay it down to almost nothing and then continue to make tiny payments the rest of the loan term.
That said, I would double check and make sure that your loan doesn't have an early payoff fee. If it does you could pay it down to almost nothing and then continue to make tiny payments the rest of the loan term.
I work in auto finance what u need to do is call your lending instutuion and adk them for the pay off amount and till when its good. See if you have enough and pay it off. but ya if u cant try to send more per month and it will directly go to principle bringing the balance down and saving u money at the end of your loan.
Seeing your loan is a fixed interest loan; the interest is charged at the beginning of the loan, therefore the current balance of your loan would be $6484.80-$1300 which is $5184.80.
However, if you were to payout the loan today, then there will be unearned interest from the financier which they would have to subtract from your loan. Also, be mindful that there may be an early termination fee involved.
However, if you were to payout the loan today, then there will be unearned interest from the financier which they would have to subtract from your loan. Also, be mindful that there may be an early termination fee involved.
How are you in auto finance? If you pay more it only goes to principle if you declare it to. The extra money prepaid the bank interest unless you specifically request a principle only payment for the overpayment.I work in auto finance what u need to do is call your lending instutuion and adk them for the pay off amount and till when its good. See if you have enough and pay it off. but ya if u cant try to send more per month and it will directly go to principle bringing the balance down and saving u money at the end of your loan.
That was not true in my case. I paid extra on my car loan and it went direct to principle without me making any calls or any adjustments.How are you in auto finance? If you pay more it only goes to principle if you declare it to. The extra money prepaid the bank interest unless you specifically request a principle only payment for the overpayment.
Same thing with my mortgage....but that's a whole other story.
Interest is calculated daily or monthly based on the amount of principle currently outstanding. Witha fixed rate and payment, the amount of each payment that goes to principle increases with each payment. Any extra paid each payment goes directly towards the principle and reduces the interest portion going forward, but it all depends on what the terms of the loan allow. If you didn't already know this stuff, then you probably don't know all of the terms of your loan. Ask the lender to tell you the payoff amount at a certain date (the day you think you can pay it off). Compare that to the sum of the remaining payments and you'll see how much you'll save.
And when you're done, vow to never pay an interest rate that is as comparatively high as the one you're paying now. That's a ridiculous rate. Did they wear a condom?
And when you're done, vow to never pay an interest rate that is as comparatively high as the one you're paying now. That's a ridiculous rate. Did they wear a condom?
That's not how it works for me.How are you in auto finance? If you pay more it only goes to principle if you declare it to. The extra money prepaid the bank interest unless you specifically request a principle only payment for the overpayment.
This is how it works for me.That was not true in my case. I paid extra on my car loan and it went direct to principle without me making any calls or any adjustments.
Same thing with my mortgage....but that's a whole other story.
It depends upon the lender. The slimier will apply the extra payments to interest, the less slimy (or regulated) will apply the extra payments to principal.That's not how it works for me.
This is how it works for me.
Best advice is to call your lender.
And remember how this feels next time you feel tempted to "sign on the line"
Bob
Legally, you only pay interest on the principle for the time you hold the principle. If any extra payments go towards interest and not towards principle, you're either getting ripped off or you signed for one screwed up loan.
Interest = Principle X Rate X Time
It must be calculated based on the amount you borrow, the rate you pay, and the amount of time you have it. If it's an annual rate and it's compounded daily, the time is the number of days divided by 365. If you have the money for less time than originally planned, the only interest you pay is based on how long you actually have it. Now, the terms of the loan may dictate that you may or may not make extra payments or pay off early, and there may be penalties, but the interest and the way it is calculated is always the same other than the period over which it is compounded, which should never be more than often than monthly.
If you've ever seen an amortization schedule, it will show you the amount of each payment, broken out by the principle and interest portion. As time goes on, the principle amount goes up and the interest amount goes down. This is a projection based on how the loan is set up. As soon as you miss or make an extra payment, the amortization going forward changes because the amount of principle remaining and the amount of time you have it has changed.
Interest = Principle X Rate X Time
It must be calculated based on the amount you borrow, the rate you pay, and the amount of time you have it. If it's an annual rate and it's compounded daily, the time is the number of days divided by 365. If you have the money for less time than originally planned, the only interest you pay is based on how long you actually have it. Now, the terms of the loan may dictate that you may or may not make extra payments or pay off early, and there may be penalties, but the interest and the way it is calculated is always the same other than the period over which it is compounded, which should never be more than often than monthly.
If you've ever seen an amortization schedule, it will show you the amount of each payment, broken out by the principle and interest portion. As time goes on, the principle amount goes up and the interest amount goes down. This is a projection based on how the loan is set up. As soon as you miss or make an extra payment, the amortization going forward changes because the amount of principle remaining and the amount of time you have it has changed.
Last edited:
It seems crazycawi has a better understanding then i do about all this so lets go with what hes says ha!!!! Oh about a comment someone else said u can get penalized if u pay it sooner but most loans now and days are simple interest loans there no pre paid penalties. But then again you need to find out what kind of loan you have. Ask crazycawi he might know that for you also.
lmfao :bitchslap::bitchslap:It seems crazycawi has a better understanding then i do about all this so lets go with what hes says ha!!!! Oh about a comment someone else said u can get penalized if u pay it sooner but most loans now and days are simple interest loans there no pre paid penalties. But then again you need to find out what kind of loan you have. Ask crazycawi he might know that for you also.
Your payment is quite low. Double it up every month if you can afford it. That's what I do most of the time. I finance for the longest time to bring the payment as low as possible. Then I double or triple pay if I can. If $hit hit the fan and $$$ is tight you can always do regular payment. Or even sometime if your ahead in your payment you could skip one just to catch some slack. If you end up with a nice bonus or tax return... pay it off!
I agree with Marthy...my payments are $121 per month, but I'm paying much more than that. Every time I pay extra, it pushes my next required payment date out further. I don't have to make a payment for a few months and still won't be late because I'm payed ahead. You need to make sure that your financing is set up his way though, please don't assume that it is without checking.
True.I agree with Marthy...my payments are $121 per month, but I'm paying much more than that. Every time I pay extra, it pushes my next required payment date out further. I don't have to make a payment for a few months and still won't be late because I'm payed ahead. You need to make sure that your financing is set up his way though, please don't assume that it is without checking.
My bike loan is like this. my payment is 106ish, and I've never made that payment. Its always been between 250-1k, just to get it paid down faster. My next payment isn't due until October 2014. :Flip:
However, my truck loan is different. even if I pay extra, they still want the minimum payment every month.