2007-11-26 13:29:16 · 5 answers · asked by Anonymous in Business & Finance ➔ Personal Finance
In a relatively short-term loan like a car loan, you do have to pay a lot more to pay off the loan in half the time. For example, for a $20,000 loan with a 7-year term at 7%, your monthly payments of $302 would have be increased to $538 (78% increase) to pay it off in half the time. While 78% more isn't double, it's pretty close.
However, the longer the term, the less payments must increase to make a significant difference. For example, on a $200,000 mortgage at 6%, payments of $1,688 for a 15-year loan are only about 40% higher than payments of $1,199 for a 30-year loan. Hope that helps.
2007-11-26 13:53:08 · answer #1 · answered by Marko 6 · 0⤊ 0⤋
Whenever you pay it off early you win because the interest is prorated backwards. In other words, an early payoff will save you $$ 'cause you won't be paying interest anymore. And on double payments, they might take extra money over and above the regular payment, but you'd have to call 'em. You could keep the extra $$ in a savings account and let it build up til you can pay off the loan, too.
2007-11-26 21:44:09 · answer #2 · answered by charlie m 4 · 0⤊ 0⤋
Call the car company and ask them if you make extra instalments in between payments if it will go directly to the principle or pay off part of the next payment.
You can call the company at any time and ask for a payoff balance which doesn't include the entire interest for the entire term, just the interest owing from that point.
2007-11-26 21:35:15 · answer #3 · answered by tapnet1 3 · 0⤊ 0⤋
Ask your lender about making principal reductions.
2007-11-26 23:02:28 · answer #4 · answered by !!! 7 · 0⤊ 0⤋
Can't...
2007-11-26 21:36:23 · answer #5 · answered by john p 3 · 0⤊ 0⤋