Quote:
Originally Posted by dori.
I have a question about this. Will paying the loan off early lower your payments going forward, or is it just to accrue less interest over the life of the loan?
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Quote:
Originally Posted by DeeezNuuuts83
Not exactly, it would be less expensive to just get a 48-month loan and pay it off in 48 months than it would be to get a 60-month loan and pay it off in 48 months. If you look at the amortization tables for both options (which you can look at on some iPhone apps) as far as how much interest is charged each month, you'll still get charged more in interest overall, even if paid off early at 48 months.
But admittedly, at 1.9% for a ~$30,000 car (assuming you put $0 down) doesn't amount to a big difference in the scenario we've been discussing (48-months vs. 60-months paid off in 48 months). I think it ended up being a ~$230 difference in the end, if my calculations are correct.
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Uh, my answer IS EXACTLY correct based on what the OP asked. Now if he/she had asked which term would be better to pay less interest, then I too would have given your answer.