Payday Loan Fairy

I know there are alot of online calculators available, but I need to know how the interest works for car loans ? I am trying to calculate the interest myself without using an online calculator and my monthyly payments.

This may look kind of crazy but it's correct.

Present Value = Cost [1-1/(1+rate)^time / rate]

20,000 = C [1-1/(1.0058)^60months / .0058

*that .0058 is .07/12

I don't have a calculator near me right now but if you multiply 1.0058 to the 60th power and sub that answer in and divide the C# by 20,000 you'll have the answer.

2006-06-26 09:01:53 by wannafren

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You didn't mentioned your country, but I believe you are from Singapore. As in the world, only Singapore Government allow banks to provide 100%, 10 yrs loan, inorder to "encourage" more people to buy car. This, no doubt contradicting their policy to control population of cars, but the Government itself are contradicting in many issues too.

For a new car, the interest rate is around 2.8% per annum. Thus if u take up a ten year loan, that say for a car of price at S$50,000 and you take up 100% loan. The total interest is S$14,000 (50000 * 2.8% * 10).
So your monthly instalment is about S$533.

But my advise is never take up a 10 yrs loan. As if you want to sell your car after 2 yrs, you will have to top up a big amount.
For example:
Assume the market value for your car after 2 yrs is S$35,000
Total instalment paid = S$12,792
Total outstanding loan = S$51,028.
Which meant you will need to top up S$16,208 inorder to sell your car.

This 10 yrs, 100% loan had already caused many SIngaporean into financial problem. The Government definitely aware of that, but the sake of the revenue from COE,ARF & ERP, they don't seem to care. But you better think thrice.

2007-10-25 19:03:28 by Mannan T

Can someone tell me if there's an online calculator that will show me how much I'm saving by paying ahead on my car loan? I want to know how much money I will save and how fast it will be paid off. (fixed APR loan, no pre-payment penalty)
Thanks for the links.

These are both good links:

http://www.bankrate.com/brm/auto-loan-calculator.asp

http://calculators.interest.com/content/calculators/monthly-payment.asp

If it is a fixed payment, fixed rate with no prepayment penalty, the amortization and monthly payments are calculated like a mortgage, so just input your rate, amount borrowed and additional payments and it should give you a good idea of how much you will save.

I believe if you have fixed payments, you reduce the amount of time it takes to pay off your loan. If they are variable payments based on the amount outstanding, then you actually reduce your future payments.

2007-07-23 14:05:57 by xxted_strykerxx

If the interest rate (as an example) is 18% on a loan of $8000 what would be the monthly payment over 60 months and how do you calculate it?

This might be useful for you

http://www.cars.com/go/advice/financing/calc/loanCalc.jsp?mode=full

2008-07-28 12:05:35 by montrealmarco1

Can anyone help with this?
My current auto loan is at $16,832.54 and if all payments ($349.91) are made on time will be paid off 7/21/13. The current interest rate is 12.65%. If I could get a rate of 6.9% and make the same payment amount, how soon would it be paid off and how much would I save in interest? (This was the type of math problem I was never ever able to do!!!!)

Thanks for your help!

With your current loan, you'd pay another $6,775 in interest through the life of the loan. If you refinanced at 6.9% making the same payments, you'd end up paying only $2,929 in remaining interest, saving you $3,846 in interest payments, and the loan would be paid off by October 2012.

You really need to use a financial calculator (or a spreadsheet with the same functions like Excel) to do the calculations. Hope that helps.

2008-02-22 13:32:03 by bbwcutey

I am looking at getting a new car, out the door the total is $18,925. It would be 5.25% interest on a loan, and I was looking at doing 72 months. When I do the math I get a total of 19,918 and over 72 months the payment comes to $276. However, the dealership said it would be $305 a month over 72 months. When you multiply that out it comes to $21,960, can someone please explain the $2,000 difference, and how interest is calculated?

The dealership is correct. (I actually got 306.99 per month, but close enough.) The difference is due to the time value of money. The longer you borrow the money, the more interest you pay. If you were just giving them 5.25% on top of the cost of the car on the day you bought it, then you would be correct and the total would be 19,918. But the dealership is going to charge you interest each and every month that you've got a loan outstanding. For example, borrowing for 72 months means your total is 21,960. If you borrowed for 60 months, your payments would be higher at 359.31, but your total would be lower -- only 21,559. You save about $400 by paying the car off a year sooner, because the dealership wasn't charging you to borrow that money for an extra year.

There are formulas you can use to calculate an actual payment under these terms. Post a question if you're interested and I (or someone else) will certainly provide one.

2008-07-15 12:30:05 by Atinybit Special