Will paying off a car loan early decrease the total amount of interest paid?
2007-06-05 14:07:24 · 3 answers · asked by Anonymous in Business & Finance ➔ Credit
Paying off an auto loan early does not affect the interest rate but it doesn't matter -- because by paying off the loan you eliminate the balance that the interest rate is applied to.
And yes, you reduce the total amount of interest because you've shortened the time that the loan is in effect.
2007-06-05 14:36:00 · answer #1 · answered by Anonymous · 1⤊ 0⤋
Won't change the apr (annual percentage rate, the actual interest rate) but since the time is decreased, will decrease the total interest paid. This assumes there's no prepayment penalty written into the contract.
2007-06-05 15:26:26 · answer #2 · answered by Judy 7 · 1⤊ 0⤋
Absolutely. What is even better is at that point you will own it. No one can take it from you. Doesn't that feel good. Doesn't make you proud to say "my car is paid for". Congratulations. Good luck.
2007-06-05 16:16:58 · answer #3 · answered by Anonymous · 0⤊ 0⤋