How can I save interest on my car loan?
Auto loans can be complicated. We want to clear some things up for you! Specifically, how you can lower your finance charges on your auto loan!
So, you work hard for every single dollar that you make every day. You can’t afford to waste any time or money on anything because you know every dollar you save can go towards:
• putting food on the table or
• other expenses you may need to take care of your family.
Let’s go over a quick typical car buying scenario at Cars and Credit Master, Home of Fast and Easy Credit Approval:
• Let’s say you need to borrow $15,000 ( known as “Amount Financed” ) for the car you and your family need.
• The interest rate on the loan is 15%.
• You agree to pay off this loan in 60 Months or five years.
• Each month you’ll pay $356.85 towards that loan.
Let’s crunch the numbers:
• $356.85 a month times 60 months equals a grand total of $21,411
• But wait – you borrowed $15,000 originally… Why will you end up paying $21,411?
• Well, the answer is commonly known as Finance Charges, which, in this case, is a total of $6411. ( wow!!! )
Want to know a powerful hint that will help you save thousands of dollars on your car loan? Warning: lenders DO NOT want you to know this…
Here it is: If you pay early or extra each month:
• You will reduce your outstanding balance faster,
• and pay less in Finance Charges.
• and Pay off your loan sooner, making you the OWNER of your vehicle.
So, let’s look at our example again:
• Your monthly payment is $356.85.
• If you pay only $356.85 every month for 60 months, your potential max finance charges are $6411.
However, if you pay an additional $100 on your monthly payments, you’ll save more in the long run. Instead of only paying $356.85, and paying $456.85 a month, your total Finance Charges will drop to $4431.05. This means you’ll save almost $2000!
What if you pay an additional $200 every month instead of $100? So, instead of $356.85, you’d pay $556.85 a month. If you do this, your total Finance Charges will drop to $3403.48. This means you’re saving over $3,000 in total! Sounds pretty good, right? But can it get better than that?
Of course, it can!
Let’s say you want to save more on Finance Charges and you’re expecting your big tax return check in 2 months with a total of $6,000. That’s pretty exciting!
You decide that you want to use half of it for other stuff and you want to use the remaining $3,000 to help pay for your loan.
If you pay an additional $200 every month, meaning instead of $356.85, you pay $556.85 a month, and on the second month, you decide to pay that $3,000 towards your principal amount on your loan, your Finance Charges will drop to $2,220, which is a total savings of over $4000! That is right, $4000 savings!
What could you do with an extra $4000 in your pocket? The best part is all you need to do is pay a little more each month and that extra savings is yours!
How much would you like to save on your finance charges? Here at Cars and Credit Master, we want you to save as much as possible on your auto loan! We’d be happy to help you put more money in your pocket! Thanks for watching, and enjoy your savings!
Cars and Credit Master
Home of Fast and Easy Credit Approval