Advice on car loan payments

[techead]

Hi there

So I need a bit of advice on my car repayment please. I figured this would be a good place to start.

I would prefer not to give real values on a forum.

I have a car loan with a 20% balloon payment. I would like to know, was this a BAD IDEA?

Im thinking of paying extra on a monthly basis, which will come right off the Capital balance.I know this wont do anything to the balloon payment, but Im hoping it will lower the interest and in the end help me in the long term. Is this a GOOD IDEA?

If I had some kind of excel sheet where I could fiddle around with all this kind of thing that would be great, but I dont and all the finance calculators dont have the required fields for additional payments and to cater for historic payments.

Can someone assist me please?

 

[Jozsef Borbely]

Hi there

So I need a bit of advice on my car repayment please. I figured this would be a good place to start.

I would prefer not to give real values on a forum.

I have a car loan with a 20% balloon payment. I would like to know, was this a BAD IDEA?

Im thinking of paying extra on a monthly basis, which will come right off the Capital balance.I know this wont do anything to the balloon payment, but Im hoping it will lower the interest and in the end help me in the long term. Is this a GOOD IDEA?

If I had some kind of excel sheet where I could fiddle around with all this kind of thing that would be great, but I dont and all the finance calculators dont have the required fields for additional payments and to cater for historic payments.

Can someone assist me please?

Hi techead,

I recommend you watch part 3 & 4 of the youtube videos i have done on debt repayments to give you a better understanding of how repayments effect the interest you pay. Link

If you want you can send me a private message or email with the exact specification of the loan, it shouldn't take me to long to build you a spreadsheet that you can tinker with. But it would help to have that information.

A point to consider is do you have enough money saved up for the balloon payment.

 

[Radioboy]

Hi there.

I was in the same boat once. I have two tips for you.

1) Chuck all your extra cash into the loan, not only will you save on a lot of interest , you will also reduce the term.

2) The balloon payment, is a lump sum that you have to pay at the end of your original term. This can be refinanced. However, if you tarnish your credit record between now and when that payment is due , you will not be able to refinance your balloon payment , and the bank will then give you 30 days (not sure) to come up with the money. So, if possible , try and save up money now to cover that balloon.

This is how i got myself out of that pickle.

 

[supersunbird]

Hi there

So I need a bit of advice on my car repayment please. I figured this would be a good place to start.

I would prefer not to give real values on a forum.

I have a car loan with a 20% balloon payment. I would like to know, was this a BAD IDEA?

Im thinking of paying extra on a monthly basis, which will come right off the Capital balance.I know this wont do anything to the balloon payment, but Im hoping it will lower the interest and in the end help me in the long term. Is this a GOOD IDEA?

If I had some kind of excel sheet where I could fiddle around with all this kind of thing that would be great, but I dont and all the finance calculators dont have the required fields for additional payments and to cater for historic payments.

Can someone assist me please?

You see, you dont have to put in historic payments on the finance calculators.

You take the current capital amount outstanding and put then in as the amount being financed, put you interest rate in and also the amount of months outstanding. Now you can play around and figure out what paying in extra would do to the period and total amount paid and such...