Morning Gentleman,
I dont frequent this part of the forum, I think this may be 3rd time in the buying/leasing section, so I apologise in advance for the newb question. I purchased my '03 Track around July '06 @ 13%, my montly is $450.00 on 21K. I admit I'm no Mathematician, but 450x24mons= 10,800 and I had my car for about two/half yrs. I called USAA and was informed my pay off is 15K, how is this possible

Thinks again for answering this remedial question

 

13% interest will do that.

 

I thought the interest rates were applied prior payment.

 

Interest is a sliding scale. You pay mostly interest at the beginning of a loan.

21k @ 13% for 60 months:



Oh. And 13% is ridiculous. I'd try to refinance it. I'm paying 5%.

 

Whoever invented the "banking system" was a financial genius: They pay you simple interest on your savings/checking accts., but charge you COMPOUND interest on the $$$ they lend out. That adds up to trillions of dollars in profit for the bankers (WHICH IMPLIES THAT THE RECENT "Bail-out" WAS A S-W-E-E-T TAKE BY OUR BANKERS!!!). Bottomline: Reality has bitten you hard, my friend! The American middle class is heavy laden with our politicians "helping" multi-millionaire folks, INSTEAD OF THE OTHER WAY AROUND!!!

 

it's sad but I had people paying 19% interest just to get into a car. having good credit pays off

 

Thanks alot for your help, I received the information needed.

Edit: my credit is a lot better now, I'm in a position to pay this ***** off, interest is killing me!

 

Speaking of pay off's, is a car loan considered "good debt"? I want to keep a line of credit open, is a credit card a decent option?

 

You bought

Bride|Crawford|DAMD|HKS|Mastergrade|NISMO|TEIN|TurboXS|VOLK| Vortech

instead of using the money to payoff the car.

 

I am in the same boat as you, I decided to call the loan company Friday just to see were I was with my loan. Not to mention the car is only worth around 12 k trade in guess estimate but I owe 21 k, arghh I hate banks


Although they told me that my Base interest rate was 9.90 % and my Daily was 5.78883 % whats the difference between both and which one am I actually paying on ?

 

There are several ways to calculate interest. It is difficult to compare one to another. That's why your contract should state APR. APR is comparable.

 

I'm guessing the "daily" number you're giving (or were given) is not a percentage. It is probably the "per diem". This means that the payoff of your loan goes up each day by $5.78. If your payoff is $1000 today, it would be $1005.78 tomorrow.

 

You all are dumb for financing a used car like a 350z. You're going to get screwed on interest rates. If you have to finance a used car like a 350z...

1. You can't afford the car.
2. You should have more financial management sense.
3. You should have bought a cheaper car and paid cash.

/thread.

 

You are sure being harsh. They may have used poor judgement, but I don't think dumb is appropriate. People do many things when they want a new car and borrowing at a high interest rate is just one of them.

 

12 grand value vs 21 grand left on the note??? hope you bought gap.

 

Get it paid off right away and avoid ever borrowing money on a car again. Use this as a good lesson.

Why do you hate banks? You are the one that bought a car you couldn't really afford and signed the note to the bank. No one to blame here but you. Since apparently the concept of an amortized loan isn't being taught in school, you kids really need to educate yourselves or you will continually be poor.

+1

Sorry, buying more car (or house, or boat, or anything else) than you can afford really is dumb. We've all done stupid things, but our economy is screwed up right now because too many people did stupid things.

 

Dumb for financing a used car like a 350z? I'm getting sick of people saying they aren't in the positon to do ____. So if you can't pay the 20-32grand in cash to buy the 350z, or don't qualify for a low interest rate you can't afford the car? What about first time buyers? My interest rate is 12.5 cause I'm a first time buyer but I plan on re-financing soon. What about those who wants to try to fix there credit by starting off with high interest then refinancing?

 

I wouldnt say I'm dumb, I had a few circumstances in my past that took me some time to un-***. They're squared away now, so I'm in a position to drop 14K and buy the items in my sig.

 

the reason your payoff is higher than you thought it would be is that a significant portion of your monthly payment goes towards interest. What you pay in interest is based on your principal, the amount of interest you pay as a proportion of the monthly payment goes down over time simply because the principal getting charged the interest rate is reduced.

it's been a while but bear with me: to calculate your daily or monthly interest, you multiply principal by the interest rate and divide by 12 (or by 365)

so: 21,000 x .13 / 12 = 227.50/mo in interest.

You were only paying $222.50 towards principal on your first month if your payment was 450.00. 13.00% will **** you up.

make more sense?

 

You should really consider refinancing it. I unfortunately am paying 12% at the moment because I don't have ENOUGH credit.