Now that you have your car loan and you signed up for sixty payments, you will find that it will be a real plus for you to pay the loan off in 48 months. Let’s say you bought yourself a $15,000.00 car with an interest rate of 8 percent, your payment will be $304.15. By the end of your loan term you will have paid $18,240.00 for a straight loan for your $15,000.00 car.
If you paid the same car off in forty months, paying approximately $428.46 your total payments would be approximately $17,138.40. these are approximations but it will give you a general idea as to how much money you can save by making your payments a little larger each month.
When you negotiate your loan, negotiate it for the lowest interest rate you can. Also tie it to the current principle owed, this way, every time you pay more money towards your principle, your interest due amount will diminish, which in turn means that each time you make a payment, more and more will go to your principle.
When you sign up for your loan, you will want to make sure that this loan does not have an early payoff penalty, these penalties can be quite stiff and will eat up a lot of the savings you worked so hard to gain for yourself.
