Use A Car Payment Calculator To Pay Off Your Car

Reviewed: August 30, 2016
By FinanceWeb

The Forever Car Payment Is A Thing Of The Past

It is easy to just accept the idea that you will forever be strapped with a car payment that you have to make for the rest of your life. You probably can look around and see everyone else in the same predicament and think to yourself that this is just normal and that there isn’t really anything you need to worry about. If you allow yourself to be lulled into this way of thinking, it is only a few steps more before you are never really getting around to paying off the car.

Pay The Vehicle Off Faster Before It Loses Too Much Value

This is an unfortunate way to look at things. There is no reason why one should have to take 5 or 6 or even more years in order to own their vehicle. A car payment calculator can help users see just how much more quickly they could have the full ownership of the vehicle.

Priorities

Keep in mind that those who travel long distances in their cars can quickly add up the miles. The more miles a car has, the less value it has when it is resold to someone else. This sounds pretty obvious, but it is important to remind people of nonetheless. If they are content to spend 5 or more years paying off something that is just decreasing in value, then their priorities for their money seem at least a little out of order.

What The Calculator Needs

The car payment calculator just requires a few simple assumptions and figures from the user to generate the figures it comes up with. It will need to know things such as the interest rate that one is currently paying as well as the term (length) of the loan in question. Those two factors alone make up a lot of the information about how long it will take to pay off assuming different payoff amounts.

If one were to just increase the amount that they were paying over the minimum amount required, they could actually breeze through the payments at a much faster clip and possibly be done with the whole thing well before they were scheduled to according to the original terms of the loan. The car payment calculator can show that person exactly how much he or she needs to add to their current payment to make the loan go away that much faster.

What About A Re-Financing Option?

Some of these calculator programs even go a step farther by providing the user with information about re-financing their car loan. If one were to decide to do this, it would be because they could get a better interest rate and thus once again lower the amount of time spent paying down the car loan. It is probably not worth it if the interest rate drop is very low. However, there are some who are able to drop their rate by full percentage points, and that really adds up over the term of the loan.

Summing It Up

The bottom line is that the calculator is a tool which motivates many to get their financial house in order. Just a little bit of work using it, and one can quickly see just how much better off they can be by paying just a little bit more.