if my car payment is 600 a month how much should i pay towards interest?

Question

my interest rate is 19%

Answer 1

Why would you want to pay towards interest? You've already locked it in. Car loans don't work like mortgages. The interest is calculated based on the entire amount of your loan and added to it, and that is what you pay. If you pay it down faster, you'll just beat the term, but you will end up paying the same amount. In a mortage, time determines how much interest you pay, there is a breakdown of interest+principle in each mortgage payment you make and in the first 10 years of a mortgage you're paying the interest first and can elect to add to the principle as you pay monthly. As you pay down the principle the new interest compounded is recalculated based on the new amount of principle, month to month. But in your car note, the 600 bucks a month is just the calculated amount, interest+principle, divided by the amount of months in the term. That amount has nothing to do with the interest you're paying, and there is no monthly breakdown of what you pay. You just keep paying until it is paid off. Unless you refinance the car, what your note is, is what you pay which includes the interest.

Answer 2

The amount that you pay in interest depends on the term of the loan. On a car loan, you will pay more interest early in the term than you do toward the last of the loan term. For instance, on a loan of $20,000 borrowed for 4 years at 19% with a payment of about $600, you will pay $317 out of the $600 for interest the first month and only $9.30 on the 48th payment. Total interest paid on this loan after 48 months would be $8,704.00. For a loan of $23,150 for 5 years, the first month's payment of $600 would include $366.54 in interest, but on the 60th month, the interest part would only be $9.37. Total interest on this example would be $12,850.00. Without knowing your principal and term, I can not give you exact figures, but this should give you an idea.

Answer 3

Pay as much extra as you can. The problem here is that most of the interest is paid early in the loan. The loan companies and dealers make their money this way. You can always go to your own bank, explain the situation, and try to refinance with them at a lower rate. That could save you a ton of cash. I'm a finace pro and know all the "ins and outs" of financing autos.

Answer 4

The interest rate should already be added to the loan.