Why is my projected car loan more than the calculator?

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Cortney King asked a question: Why is my projected car loan more than the calculator?
Asked By: Cortney King
Date created: Thu, May 6, 2021 4:09 PM
Date updated: Tue, Nov 22, 2022 9:33 PM

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Top best answers to the question «Why is my projected car loan more than the calculator»

Should you use a car loan calculator to buy a car?

  • Using a car loan calculator is just one step in making a smart financing decision. Once you get a sense of how the loan works, it’s smart to get preapproved for an auto loan before you go to the car lot. This gives you far more negotiating power than theoretical numbers spit out by a calculator.

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When financing a new or lightly used car, drivers generally have two options. They can get a car loan through the dealership or through their alternate lender, which for most means their bank, credit union or other financial institution. A driver can “buy” a car, then pay it back over a certain period of time with weekly, bi-weekly or monthly payments, which include interest.

Trade-In Your Car You can also trade in your car to the dealership for a less expensive set of wheels. Note that like selling your car, you’ll still be on the hook for paying off the remainder of the loan. But owing $5,000 is far more manageable than owing $12,000. Refinance Your Loan This might be tough to pull off.

Supposing that what you have posted is accurate, the most likely scenario is that you have a structured 5 year car loan where your monthly payments are smaller than the required fixed monthly payment for a 5 year loan, so even after 2 years, you owe as much or more than you did in the beginning! That means you have some large balloon payments towards the end of your loan.

60-Month or More Loans . Even if a 60-month car loan comes with a little higher interest rate, it is still possible to pay the loan off early (assuming there are no fees in the small print for paying off the loan early). Again, try to pay more than the minimum due. At the end of the loan, the final difference in interest may not be all that much.

You can always call your lender and obtain a payoff from them over the phone. Some lenders will calculate a payoff amount for you online as well. Just remember to add a few days to the closing date so that you have allowed for a cushion. But for most estimates, using this trick will suffice: take your principal balance and add to it a monthly payment.

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