Jerry
Dork
6/18/14 6:44 p.m.
So in almost exactly 3 years I will be 50. I owe about $16.6k on the Abarth. My regular payments are $308 per month.
How much extra should I pay to pay it off in 3 more years (vs 5) so I can buy my mid-life crisis vehicle on my 50th birthday? At this point I'm thinking Lotus Exige.
I could probably divide $16.6k by 36 and be close, but is it like a house payment where extra on the principle pays it off even faster? I paid off the Scion in about 3 years but mostly at the very end, after the ex wife was out of the picture and bills were caught up.
The answer is - "it depends". You really need to check your loan paperwork how the interest is calculated and if there is a prepayment penalty or not.
The Abarth isn't your mid-life crisis vehicle?
Boxhead is right btw.
FWIW, I'd simply swap out of the Abarth and get into something cheaper (read: sub $5k) for three years (insert popular GRM choice here)
Start by taking your current monthly payment and dividing it by two. Then pay that amount every time you receive your paycheck (assuming you get it every two weeks). By default, you will a.) pay less interest over the time of the loan and b.) make one half of an extra payment every year (assuming you get paid 26 times a year). That will be one big step without you even having to pay anything extra.
OK, I tried to maths for you, but I don't have enough information (interest rate, when interest is calculated, etc.). Your bank should be able to tell you all of this though! 
If you have extra money, send it to the lender, specifically marked "Principal only." Check the balance each month to make sure they put it on the principal and not a future payment. What's the interest rate?
Jerry
Dork
6/18/14 8:09 p.m.
In reply to Driven5:
According to some quick math, it looks like an extra $175 per month will be about right. Thinking I might do an extra $50 per weekly paycheck (auto loan is through my local bank & easy to transfer $$). This is doable.
And I'm in car-nerd love with this Abarth. I look forward to driving it every day.
Just divide by 36. Close enough if it's a low interest rate. Maybe you pay it off early that way.
Do they still have loans with prepayment penalty?
Not to get too much in your business, but at 50 do you have your retirement plan sorted out? Borrowing money to buy an expensive car may not be the best financial play.
Shhhh, we're enabling here....
OHSCrifle wrote:
Do they still have loans with prepayment penalty?
They do, that's why I suggested to check 
.
Basil Exposition wrote:
Not to get too much in your business...
... but what is the interest rate on the loan? It may (probably) make more sense to invest that extra cash rather than pay off a low interest loan.
