About finance charge?
Say I bought a car from dealer and the plan is $400 for 72 months. The total finance charge is $5000. APR is 6%. However, I start paying $1500 every month instead of $400, and my contract ended within 18 months not 72 months. As a result do I pay less finance charge ?
Public Comments
- I have met similiar problem before, here list of sites http://sitefinance2.notlong.com/5AA3Req
- since you are paying your loan in advance, so you will of-course be paying less interest in overall, because, on the total amount you paying loan as long it does not complete.
- Yes. almost all loans these days are simple interest loans and you are only charged interest for the amount of time that you actually use the money. You should save a lot of interest by paying off in 18 months.
- Your original plan was to pay $400 for 72 months, or a total of $28,800. Instead you paid $1,500 for 18 mos, a total of $27,000. So you saved $1,800 in finance charge.
