loan quote calculator
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Car Financing; Get The Car Financing You Need With This Book On Car Loan Tips, Car Loan Calculators, Quotes Comparison, Refinancing A Car And More! Do you want to know how to get the best deal for your car loan? Would you like to learn how to calculate the financing for your car loan? Are you interested in learning about the different options for car financing, whether you have bad credit, bankruptcy, or want to refinance your car loan? This book, Car Financing, will share all of this information with you and more. First, you will learn about… |
There is a saying that probably applies to those very conservative individuals in how much debt they want to assume. It goes something like this. If you cannot afford to pay off a car in 3 years you probably cannot afford the automobile. There is some truth in this bit of wisdom.
72 month auto loans at 0% to perhaps 1.9% are okay in that the accrued interest on an average- priced car is not that much. The interest charged here is certainly worth the advantage of keeping cash on hand. When it comes to an interest rate exceeding 3.9%, the rate is felt and seen when you notice how much of your payment goes to interest each month. In this case, it is not an advantage to drag out a loan. Loans of 3 to 5 years should be the maximum. Especially, since the Federal Reserve releases money to banks at no more than .25%.
Negative equity will occur in all loans, but more so with longer loans such as 72 month car loans. With most loans the decrease in value of your car will greatly surpass the speed in which it is paid off, unless you pay cash or get one for no more than 3 years in duration.
Some people purchase cars for how long they are rated to retain their value. Most all cars will return negative equity and the few dollars you gain in retention of value by purchasing a car you do not really want is not worth it. When you trade in a car for a newer model, even if you are ahead in the payments, there is always a loss involved.
A 72 month auto loan can always be paid off in advance to lessen the time of the loan. When this is done at 0% interest it is usually to decrease the amount of money already owed on credit cards and on other debts. Â
Another aspect to research is the reliability of the vehicle being purchased. Longer term financing is inherently safer when the car, truck, or SUV being financed is highly reliable and low maintenance long into its life as a used car. If you are going to be paying installments on this car for 6 years (72 months), then you don’t want to be strapped within unexpected repairs and high cost maintenance as the car ages. Most cars are driven an average of 15,000 miles per year, meaning your car will be within 10,000 miles of the 100,000 mile mark by the time it’s paid off.Â
Jeff Constable is a freelance automotive journalist and self-professed gearhead. He writes articles on everything from 0 interest car loans to bad credit car dealerships for people whose credit has been previously declined.
loan quote calculator Questions
Tough finance question- Please tell me how the equation should look on a caluclator, thank you!?
A local finance company quotes a 8 percent interest rate on one-year loans. So, if you borrow $36,000, the interest for the year will be $2,880. Because you must repay a total of $38,880 in one year, the finance company requires you to pay $38,880/12, or $3,240, per month over the next 12 months.
(a) This is not really a 8 percent loan. Instead, what is the effective monthly rate?
The correct answer is: 1.20%
Let’s denote r as the effective monthly rate you need to find.
From the $36,000 loan and $3,240 monthly payment over the next 12 months, we have
PVA = $36,000 = $3,240 × {(1-[1/(1+r)]12)/r}
Solving on a financial calculator, or by trial and error, gives r = 1.2%
(b) What rate would legally have to be quoted?
The correct answer is: 14.40%
APR = 12 × 1.2% = 14.4%
(c) What is the effective annual rate?
The correct answer is: 15.39%
EAR = 1.01212 – 1 = 15.39%
a) If you have a financial calculator like a Texas Instruments BA-II Plus you would have to enter the information into the N, I/Y, PV, PMT, and FV fields.
N = 12 = 12 monthly payments
PV = 36000
PMT = 3240 = montly payment
FV = 0 because at the end of the 12 months the loan is paid in full
Now you have to hit 2nd and I/Y to see the P/Y (payments/year) if you set to 1 payment a year, you will get your monthly interest rate of 1.204…..% (note the BA-II Plus gives an answer of 1.204 which is already a percent, so if it gave you 14.452 it would be 14%) or if you put in 12 payments per year you get the 14.452…% for b. When you decide which number you want hit CPT then I/Y and it will spit out either the 1.20 or the 14.45
c) Effective rate = (1 + monthly rate)^12
= (1+.01204..)^12 = 1.1544 = (1 + effective) Therefore
Effective = 0.1544 = 15.44%
I got a different answer for C because I didn’t round to 1.20%, but I matched the answer you provide by using 1.20 not the computed I/Y from my calculator.
Question about car loan payments?
I went to a dealer to buy a $7000 car. The bank and his third party people are quoting me $250 a month for a 48 month loan. There is a 7% interest rate, and I used one of those online payment calculators, and I keep getting around $160 per month. Logically 7000/ 48. = 145(without interest.) How is he getting $250 per month? No one can give me a straight answer. Am I missing something? Any help would be appreciated, thanks.
The online calculator is probably not calculating the compounded interest. You pay interest on the interest that accrued the month before.
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Car Financing; Get The Car Financing You Need With This Book On Car Loan Tips, Car Loan Calculators, Quotes Comparison, Refinancing A Car And More! Do you want to know how to get the best deal for your car loan? Would you like to learn how to calculate the financing for your car loan? Are you interested in learning about the different options for car financing, whether you have bad credit, bankruptcy, or want to refinance your car loan? This book, Car Financing, will share all of this information with you and more. First, you will learn about… |
