[AprilP]

Question for all you brilliant ladies.

My son (who has just moved back in at 19) has a car note with 28 more payments on it. He currently pays 311 a month. His question to me was,

If starts paying them 400 a month, how much quicker will he get it paid off?

I'm no good at that sort of math.

Or can you at least steer me in the right direction. Do I need to know what his interest rate is? Is there a formula I can calculate?

Thanks for any assistance.

 

[AheeK]

Well, if he's paying 0% interest, then he has $311 x 28 months = $8708 left to pay on his car. So, if he bumps his payments to $400 per month, he would pay the car off in $8708/$400 = 22 months. That's about the extent of my mathematical knowledge...as soon as you bring in interest rates, I'm lost.

 

[acidcookie]

Yeah, we need to know the interest rate to figure it out.

 

[McD]

there are really good loan calculators at bankrate.com that can tell you exact amounts and what you need.

 

[Guest]

I usually use the calculator at this site - you do need to know the interest rate though.

http://www.quicken.com/banking_and_credit/loans/

Click on "Loan Calculator" on the left.

 

[Guest]

Just making some guesses - if there's about $8,000 left on the loan, and he has a 7.5% interest rate, upping the payments from $311 to $400 will cut his repayment time from 28 months to 22 months.

 

[pkellyc]

I am just plain lazy. I also use http://www.bankrate.com/ for it's calculators. In fact show it to your son my dd is buying a car and plays around with it all the time. I can be an how long does it take eye opener for them.

 

[Laurie in Bradenton]

Warning!!!Some loans will not let you pay them off early. Some actually charge a pentalty. Check with the loan company. Also make sure if your payimg extra and its allowed that you put in writing with each payment how you want the extra funds applied. ORRRR they can choose and they will always choose for the monies to go to intrest owed on the original note.

Laurie in Bradenton

 

[frugalwanttobe]

Thank you everyone for the links to these calculators. I am going to have fun with them. These are so easy to use.

 

[AprilP]

Back again.

I found out from my son the following:


Original amount financed: 9904.30
Term of Loan: 36 months
Interest rate: 8.0 percent.

I tried the calculator at bankrate.com but I can't figure out how to make it account for the 8 payments we've already made. It only figures how much quicker it would be paid off if we added 100 to EVERY payment, not just the ones from here on out.

This is so much math, it's making my brain hurt.

 

[rosebron]

AprilP:

Based on my calculators, if his current balance after paying on the $9904.30 for the past 8 months at 8% should be $7,903.39.

So I would enter $7,903.39 as the "original balance" with enter 28 months for the term and 8% for the interest and add the extra $100 payment/month.

His payments should last an additional 21 months versus 28 months (pay off 7 months early). So he should make his last payment in November 2008 versus June 2009.