ok..here's the thing. i bought a 2004 Nissan today. they gave it to me at 10,000 u.s. dollars. then for some insurance or something like that its was like 12,000. financing with the bank or what ever it turned out to be 16,000 u.s. dollars.
tell me this is not a rip off. . yup i know.
newayz....i will be paying 270.00 us dollars for 60 months which is 5 years. my question is..,...
if i make paymets more than 270 dollars would my interest lower? would i need to pay 16,000 us dollars total if i pay more than 270 dollars a month?
is there i way i can sell this car to the bank and then make payments to the bank so i can lower the total price of 16,000...
what can i do ... ?
im trying to pay this car in 2 years or a year and a half...
2007-05-22 07:01:37 · 6 answers · asked by STYLES M 3 in Cars & Transportation ➔ Buying & Selling
As stated above, you need to check with your lender. Sometimes the amount of the loan is the amount of the loan and the ability to pay it off early is negotiated at the signing of the loan papers. You can also try to refinance with another bank, i.e. a bank or credit card company you already have an account with. A car dealership will always give a low selling price, but it is often very different than the price after interest and other "fees".
2007-05-22 07:15:41 · answer #1 · answered by Michael S 2 · 0⤊ 0⤋
Assuming your loan is a standard "simple-interest" loan (where you're charged interest each day based on the balance you owe), then yes, making extra payments WILL lower the amount of interest you pay over the life of the loan, since you are effectively lowering the balance you owe every time you make an extra payment. This also assumes there is no pre-payment penalty for paying off the loan early (not common, but it happens).
Are you sure your payment is only $270 a month? Based on the numbers you stated ($16,000 loan for 5 years), a monthly payment of $270 means you are getting a loan at half a percent (.5%)! If your interest rate is truly that low, paying it off early will barely save you any money, as you'd only be paying a grand total of $200 in interest over the life of the loan.
2007-05-22 07:51:14 · answer #2 · answered by nevergonnaletyoudown 4 · 0⤊ 0⤋
If your paying more than the minimum required per month, all your really doing is reducing the amount owed to the bank, it does not lower interest. The monthly interest is set between the auto car company or salesperson and the bank, once its done, it will stay that way.
Also, there is probably no way you can sell the car, seeing it is still the property of the loan holder and you are the one borrowing the loan. Until the loan clears, the liens of the car is given to you and you are officially the owner, then you will be able to sell the car.
Until then, the only way you can cut off the total of monthly interest added up paid to bank would be to pay in full of the remaining amount, the loan is owed to the bank.
2007-05-22 07:11:16 · answer #3 · answered by hhsdan 2 · 0⤊ 0⤋
You would need to check with your bank to be sure, but I think the extra that you pay toward the car would come off of the principle part of the loan. This would not lower the interest rate of the loan. It would, however, lower the amount of principle that the interest is accrued upon.
2007-05-22 07:08:06 · answer #4 · answered by ladydamorea 3 · 2⤊ 0⤋
your interest will be the same each month but say if you pay 400 a month then the extra 130 will go to principle. if you pay more than the minimum payments then you will be paying less than the price you were told in the first place because you will be paying it off early and therefore less interest accrues over time.
2007-05-22 07:08:37 · answer #5 · answered by super_sport_ss_2002 2 · 0⤊ 0⤋
It should go down a little bit, not to mention, it'll look VERY good on your credit when they see that you paid off a car that quickly :) Try to get it paid off asap.
2007-05-22 07:06:50 · answer #6 · answered by Anonymous · 1⤊ 0⤋