I wanted to write an article that would save every reader hundreds of dollars on a simple interest car loan. I would feel comfortable saying that over 99 percent of the readers have a simple interest car loan, and less then 1% drive a paid-off car.
What is a simple interest loan? You are charged a daily rate (per diem) based on the following: Balance, Interest Rate and 365 days in the year.
Here’s an example: $10,000 x 12% / 365 = $3.29 a day. In 30 days you will have paid $98.63 in interest. And for every day you go past the due date, $3.29 is added on for that month you paid! How many days have you paid late on your car note?
Here are some tips how to save money on the interest
- Divide your monthly payment up each month based on how many times you get paid - you will pay less interest!
- Pay more than your monthly payment - whatever extra you pay whittles down the principal!
If you are in a position to take advantage of both of these suggestions, on a $20,000 car note you can save thousands of dollars!
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