Carl! THANK YOU. That is very useful I really appreciate it thanks.

your note agreement would tell you.  Should not normally be a penalty for paying extra each month.  this only makes sense though if you dont carry a balance on higher interest rate credit cards.  payoff the cards 1st.

Mortgage and auto loans are different. The formula in the spreadsheet will not work for auto loans. Here is why:

mortgage payments are different from car loan payments. A good way to think about mortgages is that one 30-year mortgage doesn’t have a single loan, but rather individual loans with terms of 360 months, then one for 359 months, then one for 358 months and so on, all strung together.

Each month sees a payment calculated with a smaller loan balance over the new shorter term, and while the total of the payment remains the same, the amount of interest you pay in a given month decreases while the amount of principal a person pays increases. If you prepay mortgage, you save money on paying interest.

Car loans can either be: simple interest add-on (or pre calculated) loans or simple interest amortizing loans. Simple interest add-on loans are written as a single loan. All of the interest that will be due is calculated up front, added to the total of the loan as a finance charge, then that sum is divided over the number of months in the term to arrive at monthly payment.

Each payment consists of exactly the same amount of principal and interest. Prepayment won’t save money because all calculated interest has to be paid. Simple interest amortizing loans are the most common type of auto financing available. They work like a mortgage, with a declining loan balance and declining term producing a constant monthly payment with changing compositions of principal and interest. Prepaying such a loan can save you some money.

Stop borrowing money. If you just think about it you are giving away your money. Save up and buy a car.

This thread is pretty helpful, however, what I have gathered somewhat confuses me in regards to my auto loan payments. 

 

For a 5 figure loan, my minimum payment began at $350/mo for a 3.3% rate starting November of 2017. I have steadily paid $550 each month since I started and my minimum payment has been $0 for a while. Obviously I still have a balance and my payment has not changed, but that doesn't necessarily mean my $550 is 100% principal right? How is the principal/interest payment calculated then? Am I only paying interest at that point and a really good chunk of my payment is principal now? I guess I just really don't understand how my lender changed my min. payment from $350 to $0.

You must pay the minimum due. This usually includes a little bit of principle and lot of interest since auto loans are usually front loaded.
As far as paying any additional towards only the principle, you'd have to talk to your lender or read through your contract. With my loan for example, any additional payment I make is applied to next month's payment up to 2 months before being applied to the principle. However, if I call them and make a large payment (common during tax return season) it will all apply directly to the principle.

When you send in extra payments, you need to make sure how the lender applies the extra funds. They may apply it towards your next payment and not toward the principal only. You have to be very specific with some lenders. They don’t always apply the overage to principal.

Yes, if you make the minimum payment, then you can pay some of the principle balance. But you have to make sure you specify when you make the payment you want it going to the principle. If not they will put most of it to the interest

Super Carl,

Thank you for the spreadsheet.

You must have a higher interest rate. I think the smartest move would be to let go of the ego of have a newer car.. sell the car and buy a much cheaper car. It will save you so much money in the long run.

My car payment was a little over $278 a month but for all but 2 payments, I’ve paid $300 a month and it still has shortened the amount of time to pay it off, in addition to some of the interest.

To make it a little easier you can also visit bankrate.com and play around with extra payments at various times of the year

In a short answer, no. You have to make the minimum payment. Then pay extra and tell them, specifically, that the extra payment is to go towards the principle. Always do the payments separate so you can see and make sure it is going toward the principle.

I agree with @gary_p  he is right, You can also use this Amortization calculator

Plus - by paying more you’ll, effectively reduce your interest rate