If anyone can answer this and explain it in a way that won't make my head explode, you'll get 10 shiny new points!
I'm sooo bad at math! My monthly payment is $214, and the interest rate is 22%. I called today and was told that if I paid the car off today it would be $930.99. I had originally thought the car would be paid off in January, but now it's looking more like February.
2006-11-06 03:25:11 · 5 answers · asked by gottagrinn 1 in Business & Finance ➔ Credit
if you call back the bank where you have your loan, they'll tell you what your total balance due is, including the interest
2006-11-07 03:58:53 · answer #1 · answered by luvdatbeard 3 · 0⤊ 0⤋
Your interest is accumulating daily. Sounds like a high risk loan, so the interest rate is calculated differently. Think about it - you are at a nearly 2% monthly interest rate!
If you can, put $500 (or more) on the loan making sure you tell them the extra $286 goes towards principle. If you don't, they may just count it towards you next months payment, which is not the same. A payment is principal and interest. By telling them the extra goes towards principle NOW, it reduces how much interest you are charged for the remainder of the loan. It will save you a few dollars as you are at the end of the loan.
On my last car loan, I made 6 payments monthly. It was a 5 year loan. I paid it off in 8 months due to saving over 4 years of interest. You are better to make extra payments early in the loan as it lowers you interest owed over the life of the loan.
Good Luck.
2006-11-06 04:19:37 · answer #2 · answered by Joe S 6 · 0⤊ 0⤋
The $930.99 doesn't include interest beyond "today" so if you aren't paying it off right away, you're going to have to pay more.
Your loan company could probably tell you the total you'll be paying and when your last payment will be--you probably asked how much you owed, so that's what they told you, you need to ask the total amount you'll pay if you don't pay it off early.
And YIKES, 22% is incredibly high interest! Pay it off early if you can, and you'll save money.
2006-11-06 03:39:16 · answer #3 · answered by lee m 5 · 1⤊ 0⤋
the interest on the loan stops the day you pay the car off. so that is why they told you the amount if you paid it off today. if you make the payments it will be 214 times the amount of payments you have left.
2006-11-06 03:29:18 · answer #4 · answered by SKYDOGSLIM 6 · 0⤊ 1⤋
Obtain a free copy of your credit report.
2006-11-06 03:56:36 · answer #5 · answered by Anonymous · 0⤊ 2⤋