Originally Posted by xsh0tya

We are getting a little off topic, so I'll just finish with this, when we went to buy a Mazda Tribute for the wifey, the amount of the loan was linear. It was a set amount this was done through the bank. So if the car was 1000 and the interest was another 100 over the 5 years. The total loan amount was 1100 over 5 years, with a fixed monthly payment(We have had the vechicle for 3 years now and she makes the same payment). Now I don't know what the details OP's loan was, if it was fixed or variable. But assuming it was fixed which would be cost more than a variable loan(every payment would bring the monthly payment down) those numbers would be true.

Originally Posted by BrettJacks

Just because the payment is the same doesn't mean the interest is the same. The way loan amortization works is that you have a set monthly payment(let's say $450). For that first month, your $450 might end up paying $400 to interest and $50 on the principal. The next month it might be 445/55, etc. You pay very little on the balance until the end of the loan.

Originally Posted by xsh0tya

That makes sense but wouldn't that make the actual interest amount a finite number? So in total you pay the interest first then make the purchase price of the car in the remaining payments? So if the car is 1000 and interest is 100. You pay 10 bucks a month, and within the year you paid the 100 back in interest and now making payments on the 1000.

Originally Posted by spwolf

it goes like 90% interest and 10% principal and on the last one it is 90% principal, 10% interest, amount is adjusted every month and everything is precalculated before you sign the contract.

And interest is per year, for amount you still owe... so sure first year is 1.9% of 27k, but 2nd year it is 1.9% of 22k, etc, etc, so you cant just 5x1.9%x27k to get interest amount.

Reason you pay interest more at the beginning is for them to make sure they make money before you cant pay the car anymore or want to buyout the loan before the term :-).

Originally Posted by blacksc400

Here you go, plug in the numbers and you can see the payment break down table.

http://www.bankrate.com/calculators/...alculator.aspx