Use an Auto Loan Calculator to Eliminate Surprises
View PDF | Print View
by: laurawilder
Total views: 44
Word Count: 515
Working out how much your monthly car payment will be is more complicated than dividing the amount of the loan by the number of months in the loan term. Interest, fees, and taxes add a hefty chunk to the total amount. When you work out your budget for buying a car, do the initial math with an auto loan calculator so you know exactly how much you can really afford to pay for a car before you start car shopping.
Auto loan calculators typically require information like the amount of the loan, the term of the loan in years or months, and the interest rate. A few calculators will also consider where you live, whether you plan to pay any extra on the loan to informally reduce the length of the loan, whether your old cars trade in value or a down payment will reduce the amount of the loan, and whether sales tax or fees will add to the amount of the loan. Some auto loan calculators have a "loan vs. lease" option that will compare the cost of an auto lease to the cost of a loan on the same car.
Inputting accurate answers is essential to using an auto loan calculator. Tiny variations can add up to big differences in your monthly payment. When in doubt, be conservative. For instance, if you do not know exactly how much interest you are likely to pay, estimate your interest a little high. If you do not know exactly how large a down payment you will be able to put down, estimate the amount a little low.
Experiment with the loan calculator, entering a longer or shorter loan term, a higher or lower interest rate, more or less of a down payment, and so forth. Get a feel for how small variations affect the bottom line. Understanding how the different parts of an auto loan work together will be a great help when you negotiate with the dealership or the bank for funding.
Also remember to think in the long term as well as the short term, and a low monthly payment does not always mean a less expensive loan. A $15,000 loan with 10 percent interest, paid off over three years, will cost you $484 per month, for a total of $17,424 over the life of the loan. If you pay off the loan over five years, your monthly payments drop to $319, but the amount you ultimately pay rises to $19,140. An auto loan calculator that calculates the total amount of the loan as well as the monthly payment is a great way to avoid being penny wise and pound foolish.
Buying a car is a big step. Start the process with the most accurate information you can get, and use an auto loan calculator to check your math and work out how much of a loan you can afford. It will make the process of buying a car far more pleasant. Good luck, and happy shopping!
About the Author
Get more on auto loan calculator, stop in at .
Rating: Not yet rated
Comments
No comments posted.Add Comment
You do not have permission to comment. If you log in, you may be able to comment.Sites Using Our Articles
Rebuild-Credit.usRebuild Credit is a site dedicated in providing quality information concerning the establishment and rebuilding of personal credit. Quality articles and resources are provided to assist anyone with bad, poor, or no credit in establishing a high credit score.
Quality-Web-Design.com
Quality Web Design is a site that provides Tips and Resources that assist up and coming webmasters with building a quality web presence.
Personal Health Options
Personal Health Options takes a serious look at the health hazards perpetrated on an unsuspecting public resulting from the polluted and chemically saturated environment we all share. Numerous links and resources are presented at this in depth look at the causes of cancer and other chronic and fatal diseases caused by these factors. Alternative solutions to the traditional treatment are presented as well.