Auto Loan Amortization Chart Tips and More
Generally people look for an auto loan amortization chart when they are searching for an auto loan to purchase a vehicle. The concept of a chart that allows you to see how the interest on your loan gets amortized over time is a relatively old one.
Before the quick online calculators, an amortization chart was a necessary thing. Before the quick calculations that spreadsheets and online forms provide, these handy tools gave customers and lenders alike a good idea what the terms of a particular loan would be, without having to resort to complex calculations done by hand.
It would show the payoff schedules for a variety of standard amounts. The items on the chart might not show the exact amount of a particular loan, but they would provide a general idea about how much interest a particular loan would require. Today, one of these old-fashioned charts isn’t really necessary, because handy online calculation tools are available all over the Web that allow consumers to enter in the specific terms of the loan they’re considering, to get the exact payment they’ll end up with.
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Amortization is a concept that every smart consumer should understand. With a mortgage loan, which generally stretches for 15 to 30 years, the total interest gets amortized so that more interest gets paid up front. If you’ve ever had a mortgage and looked at your payment schedule, you’ve probably noticed that your first several years of payments were almost entirely interest, with very little going to the principal on the loan.
Amortizing a vehicle loan is generally quite different. If you look at an auto loan amortization chart, you’ll see that the interest vs. the principal in the payments for the entire term of the loan is generally the same. That means you’re paying the same amount of both principal and interest on the first payment as you are on the very last payment you make.
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When you approach a lender to find out about financing for an upcoming vehicle purchase, you don’t have to wait for the finance company to tell you what your payments will be. If you know the selling price of the vehicle (the principal), the interest rate and the number of payments you’ll be making (the term of the loan), you can very easily plug those numbers into a modern amortization calculator or a more traditional auto loan amortization chart and find out exactly how much interest you’ll pay, and what your payments will be. – Written by: Will StacyWritten by: