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Question for the Money Doctors

Question submitted on Jul 20, 2020.

Question

Hi Money Doctor, I have a car loan that I am trying to pay off sooner rather than later. The car loan was for 23,585.00. The term loan was 72 months. The interest rate is 6.64%. I have 21 more payments. My monthly payment is 399.14. My question to you is if I make a onetime payment 2000.00 on principle only, how many months will that knock off the loan??? I would like to pay this off as soon as possible. Thank you for your time.

Answer

Based on the interest rate you are paying, I think paying this loan off early is a good idea.  You are actually guaranteeing yourself a 6.64% return on your money.  If you applied an additional $2K to your loan at this point it would cut 5 payments off your loan and reduce your overall interest by $250, so it would be beneficial to consider that.   


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