Car loan payment with PRINCIPAL + INTEREST example

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Жыл бұрын

In this video, I'm going to guide you through the ins and outs of car loan interest calculation. No more confusion or uncertainty! We'll focus on a practical example of a $20,000 car loan with a 3% interest rate over five years.
Join me as I break down the process step by step, ensuring you understand how your monthly payment is divided between principal and interest. Discover the impact of a decreasing loan balance and how it affects your payment allocation.
By the end of this video, you'll have the knowledge and confidence to calculate your car loan payments accurately. Subscribe now and empower yourself with the skills to take control of your car loan. Get ready to become a savvy borrower!

Пікірлер: 68

@danielm3192 5 ай бұрын

I bought my Mazda in 2010 at 0% interest, and I paid it off in 2013, and I’m still driving it. I’m at 115k miles now at almost 14 years. It’s still running and looking great! If you buy new, 0% interest is the way to go if you can get it!

@yugioh20101 4 ай бұрын

What was your credit score ?

@brisson182 4 ай бұрын

What does this have to do with the video though? Nothing

@Lia-ij4mg 3 ай бұрын

@@brisson182then why comment on it. negative nancy

@orangorang1239 4 ай бұрын

can i ask, what makes the payment got decreased?

@TravisSickle 4 ай бұрын

payments don't decease, but the amount going towards interest does.

@edgarc.3433 4 ай бұрын

So if someone was to ask what is the TOTAL amount that was paid to interest in the life of the loan, how do I find that out?

@ethanlima5792 2 ай бұрын

calculate the EAR (Effective annual rate) and then use Present Value of annuity formula with EAR instead of APR and you’ll get the total amount (principle + interest)

@KubanKevin 4 ай бұрын

Simple interest is best. Every month you pay interest only on your remaining principal balance. So each passing month, less goes toward interest, more goes toward principal. Performing a an extra principal payment further reduces the amount of interest you are paying.

@user-cb9je6oj7u 2 ай бұрын

For godly sorrow worketh repentance to salvation not to be repented of: but the sorrow of the world worketh death. (2 Corinthians 7:10) Let the wicked forsake his way, and the unrighteous man his thoughts: and let him return unto the LORD, and he will have mercy upon him; and to our God, for he will abundantly pardon. (Isaiah 55:7) For the wages of sin is death; but the gift of God is eternal life through Jesus Christ our Lord. (Romans 6:23)

@charlessnortley4519 6 ай бұрын

Wow I got screwed first time buyer fresh credit of only 5months at 698 fico. I'm paying 12.51% interest at a 377.10c car payment. I forgot how many months I believe 72months.

@charlessnortley4519 6 ай бұрын

My only question. Will my credit score be boosted while paying off my interest an into the car. I wanna save a thousand dollars will I have the option to pay on principal. Over paying on the car payments. Edit** I wanna save a thousand every 3-4 months an pay it to my principle is that an option or will it always be the total loan an interest grouped together.

@Lockettinvest 6 ай бұрын

Me to first car at 19 was paying 21% interest 399 I refinance a yr later with a credit union 4%interest 220 it’s paid off now 🎉

@charlessnortley4519 6 ай бұрын

@@Lockettinvest good for you. So pay it for about a year an go refinance with a credit union

@limbogt747 6 ай бұрын

@@Lockettinvesthow do you get into credit unions?

@emplays22 5 ай бұрын

@@limbogt747it's like opening up a bank account. The only difference is that credit unions are better than banks but have fewer physical locations.

@munchingmakenna5776 11 ай бұрын

I still don’t get it? How am I paying 7000 on a 3 percent car loan of 23000?

@swank1957 10 ай бұрын

You’re paying the interest balance and not the “actual” balance. Practically just like a tax just for taking long to pay lol

@TravisSickle 10 ай бұрын

kzbin.infoyKWcS1o3yag?feature=share

@malcolmmcintire869 10 ай бұрын

Wouldn’t a $7000 interest for a 23,000 dollar be 30% and not 3%???? You’re talking 30%- 1/3 of the overall payment

@malcolmmcintire869 10 ай бұрын

It would be 690- rounded up to 1000 lol

@kevinfilbin7688 8 ай бұрын

Why not jus save up some cash and buy a used car? Then you wouldn't have to make a payment every month

@FactsofMotivation350 8 ай бұрын

Who gets 3% on a used vehicle? BECU current rate starts at 6.99%.

@TravisSickle 7 ай бұрын

They used to be low but yes, rates have risen. You can thank our government. 😎

@Almgaming3 Ай бұрын

Mines 5.99

@cosmxcvortex1371 Ай бұрын

Mines 3.9

@luis4210 28 күн бұрын

I don’t know how I went from 18% to 3.6% from a refinance but im happy I did. I went from Santander to velocity credit union. This was 2 years ago

@rosaapinaa9058 10 ай бұрын

What is the interest rate of this year if they have a 600 credit and try taking out a used car from a dealership with a 2 year payment plan and the car is 14,000 ? ??

@TravisSickle 9 ай бұрын

couldn't tell you.

@Niqu33n 8 ай бұрын

😭😭 damn im tryna find out right now.

@Niqu33n 8 ай бұрын

@@TravisSickleexamples?? 😭plz

@jr5131 7 ай бұрын

@@Niqu33nits gonna be like 20% 😭 i have a 760 n i got 15% int rate 💀

@akreacts8296 6 ай бұрын

I was told w being right under 700 & the 2k I’m gone put down on a 4th gen Lexus GS350 Base/F Sport.. I work in sales at a Honda dealership as the photographer so I learned the market fast & was told by a salesman.. if I hypothetically was looking at cars at 25k.. I’d be looking at high 4’s low 5’s for the note.. I’ve been pre-approved for 10% for up to 32k.. but the car itself out the door price max like 20/21k estimated 220/250 for full coverage ins. Don’t need a new car, but wouldn’t mind nice RWD Toyota as my 1st! That actually keeps the value as I’m paying it.. plus maybe i negotiate down my pre-approval

@MK21waSheRe 7 ай бұрын

My loan in the beginning was for 316k originally and after paying $16k and the loaner locking my rate at 5.99% with 9k they now say that I still will be owing $316k and they asked for another $5k because they say the closing cost are $10 k so we added those 5k to the loan and now they say the loan amount I will be owing at the end will be $321k because of a n FHA interest. Does this makes sense to you? You are a professional and know more for sure. This is for a new construction house and I am about to sign final closing documents and will appreciate a response as soon as possible. Thank you!

@TravisSickle 7 ай бұрын

I can’t validate here and without seeing it but you should look it over with a pro if you’re uncertain.

@joshua-zj1ks 3 ай бұрын

Genuine question, debating getting a £20,000 loan for a car over 5 years, the interest is £23,250 over that time, if I can pay the loan off in less than 2 years will the interest go down to close to £20,000

@tylerpinkerton2720 2 ай бұрын

Redo your calculations lol. Interest def isn’t that much

@joshua-zj1ks 2 ай бұрын

No the £23,250 is total the interest is £3,250

@zenster1097 7 ай бұрын

I though you have to pay interest before you pay the original amount as a priority.

@TravisSickle 7 ай бұрын

that's true but I'm wondering what made you think I was saying otherwise.

@inventitious1609 4 ай бұрын

I had an auto loan from credit acceptance, Made perfect on time payments for 5 years from May 2013 - Oct 2017, How can I leverage that?

@alexrodriguez3914 7 ай бұрын

So with those numbers what’s the actual interest in real numbers that you would be paying?

@TravisSickle 7 ай бұрын

The amount of interest decreases each month even though the payment stays the same. The reason for this is because you only pay interest on the amount of the loan but each month you're paying it down little by little so the loan amount decreases a little and so does the interest.

@jacrispy219r5 5 ай бұрын

@@TravisSickleyes but the problem is you pay way more than 3% over the duration of the loan, making 3% a decieving number

@FTBnoved 4 ай бұрын

Hey that’s my car payment lol

@Diverse0725 4 ай бұрын

Translation: a 3% annual percentage is 0.25% per month. Interest on your first payment on a $20,000 loan is 0.25% or $50. In this example, $50 would be interest, and 309 would be knocked off of the principal, putting the new principal balance at 19,691. Repeat 19,691×0.25% = $49.22 of your next payment will be interest.

@TravisSickle 4 ай бұрын

that's not exactly how it works but sure.

@Diverse0725 4 ай бұрын

@@TravisSickle how much would the interest be in the first month of a $20,000 loan?