I bought my car in February, 2007 for $27,000. With interest, my total loan amount was 32,800 over 84 months, a 7 year loan. My monthly payment minimum is $385, but i always paid $400. This month, i paid 600, and next month (november) i will pay about $500 and finish the loan. How much did i save by completing the loan 2 months early? They calculate interest daily. I tried doing it with a calculator based on total amount, but my calc says 84 x 385 is almost equal to 82 x 400. Did putting in an extra $15 a month actually help?
There is some mistake. Your numbers don’t make sense. Or you have overpaid.
What was the interest rate on the loan?
I played with a loan calculator to find your answer at some different rates. Paying $15 extra over 60 months at 10% is the same as amortizing a $706 loan. Your total interest for the period would be $194.03. Now I’m sure (?) your car loan is well under 10%, so you saved well under $200.
If it’s 5%, a bit more realistic, then you saved about half that much.
Let’s put it another way. Let’s say you paid $900 at the beginning ($15 x 12 x 5). Let’s say your interest rate was 5%. You would save $900 * .05 = $45 in interest for five years for a total of $225.
So I think the quick and dirty answer is under $200, probably a lot less.
Oh, reading comprehension. 7 years.
OK, suppose you had paid $1,260 right off the bat ($15 * 12 * 7). At 5%, you would save a max of $63 * 7 = $441.
But you didn’t pay it all at once, so you probably saved a couple hundred bucks max.
Paying your car loan off a couple months early has almost no effect on interest saved, since there is very little principal at the end, and thus interest is tiny for each month.
I must be missing something.
$32800.00 / 84 mo = $390.48
$385.00 * 84 mo = $32340.00
So, those don’t tally. Then you say you paid
80 * 400 +600 +500 = 33100
which is above both numbers given above.
What am I missing?
I think you are missing that he would have paid a deposit.
Where do you read that? I can’t see it. What I see is
which does not jibe with any of the other numbers.
So, I’ve made some assumptions. Most of them are probably incorrect, and the OP will no doubt drop in to share some crucial information he just expected us to know.
Assuming a $27,000 loan at 5.25 APR, the monthly payment would be 384.80, which I’m comfortable with being close enough to the OP’s numbers. I’m also assuming the first payment came due in March 2007, because setting up loans takes some time and it’s slightly more charitable to the OP. I then set up an amortization table to track how much principal was paid off each month and in total using the numbers given. Under that scenario, the total payments if the loan were paid over 84 months would be 32,322.81. Paying $400 instead of $384.80 would result in about $69.85 in principal remaining after October 2013’s ($400) payment.
In conclusion, I’m just as confused as the rest of you.
We’re making this unnecessarily complicated. There is no need to know the interest rate. The OP says “my total loan amount was 32,800 over 84 months” which makes the interest rate etc. irrelevant. We can deduce them for fun but they are not relevant.
The OP says $32800.00 / 84 mo = $390.48 monthly payment
Then the OP says the monthly payment was $385.00 * 84 mo = $32340.00 which already does not jibe with the foregoing.
Then he says he has already paid 80 * 400 +600 +500 = 33100 which exceeds and does not match any of the two earlier data.
In any case, the question “how much did I save” seems extremely easy to answer: subtract the amount you actually paid from the amount you were supposed to pay if you stuck to the original terms.
Maybe a down payment of $500?
Leaving 32300/84 = $384.52 per month?
The interest rate and other terms may be relevant. Many car loans may be simple interest but the OP notes “They calculate interest daily” which tends to imply the loan company was offering a compound interest loan, which is a bit odd but not unheard of.
Even with compound interest, the numbers don’t add up, by the way. For a $27000 principle and monthly payments of $384.52, the annual interest rate would have to be 10.3% and the cumulative amount paid by the end of 84 months would be $32300, not $32800.
To get $32800 by the end of 84 months with a $27000 principle, the monthly payment would have to be $390.43, which still doesn’t gibe.
You are confusing very basic things. A down payment is not included in the amount of the loan.
Not the way the OP is presented. If I sign that I will pay X number of payments for Y dollars each then it does not matter how I got to that number. Those are given. The question is not “what was the interest rate?” the question is “how much did I save?” and with the information given the answer is “you overpaid”.
Principal.
On the bright side, I got to play with a spreadsheet recreationally, so it wasn’t all bad.
Ha! I do that all the time! It is just amazing what you can do with a spreadsheet. I have a loan analysis spreadsheet which can compare loan terms better than probably any bank loan officer can do. Of course, they are not the ones interested in making things clear.
But, I have also noticed how easy it is to confuse the statement of a problem by adding an unneeded piece of data which the person resolving the problem will try to fit in somewhere.
An airplane is going 400 MPH, How long will it take to cover 400 miles? = easy.
An airplane flying at 5000 ft altitude at 400 MPH with a head wind and a pilot called Bob who suffers from acid reflux. Neglecting the curvature of the Earth and other air traffic how long will it take to cover 400 miles? = People go off in all directions. Doubly so at the SDMB where Einstein and the speed of light will be mentioned by the 10th post and there will be no consensus on whether the problem is even solvable until quantum computers become reality.
Also, don’t forget the part where the plane is carrying a load of 2 tons of feathers & a flight attendant with a bad stutter. 
And whether or not it took off from a treadmill. With Monty Hall on board.
But where will we bury the survivors?
Is this a trick question? I assume either in the ground or at sea, unless they are cremated. But then they aren’t buried.
csmodes, you just got whooshed by the oldest woosh in aviation humor. Congratulations.
Older than aviation very likely. I first heard it about a train accident.
Really? Huh. So the survivors of the Titanic were never buried? What about the survivors of the American Revolution? And the survivors of the great plague? They weren’t buried? Everyone dies… so we are all buried, cremated, entombed, whatever.
I got the whoosh. I was whooshing back.