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How do i use an amortization schedule to payoff my auto loan quicker? |
How do i use an amortization schedule to payoff my auto loan quicker? Using a amortization schedule to pay off your loan sooner is easy!!! What you do is make your normal payment and then add the principle on your next payment which allows you to pay two months at a time saving you the interest that you would of payed. If you do this every month you will pay off your loan in half the time,But keep in mind that you are not allowed to skip a payment just because your amortization which you have marked off as you paid extra on says you don't owe till two months later. You will need to check with the bank and make sure you will not receive a penalty for early pay off. The schedule itself won't do so; increasing the amount or frequency of payments will, and you can determine from the terms of the loan how much it will change things. You can draw up your own amortization schedule (Excel is good for this) to see the effect of various payment plans. You dont really. Its more of a layout of your payment's principal:interest ratio. A quick tip though, by making atleast one extra payment a year(13 payments) will save you quiet a bit of interest on your mortgage and can knock off a good piece of principal. |
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