So I bought a car last year for 37k total and put 12k down making my loan 25k, 6 years with a 3% APR. My cars current value is 30k. From what I’ve heard and have seemed to find online is that the bank still owns 25k on the car, the 5k I’ve paid so far on the loan is theirs and doesn’t go towards my ownership of the loan/car, and I only get 5k back. Is that correct? I don’t understand why but I’m also not the most financially versed
In: 0
Unless you are dealing with a seriously shady lender that targets poor people, your loan payoff should have gone down by now. But there’s more interest paid early in the loan than later, because of something called amortization that lenders do to balance the payments over the life of the loan.
Using this [calculator](https://www.amortization-calc.com/auto-car-loan-calculator/) and the numbers you provided, after a year you should have paid about $674 in interest and paid down the loan balance by $4717.
BTW, your car shouldn’t have lost $7k in value in today’s market over the last year. Because of supply chain issues, etc., used cars have been holding their value extremely well. Not guaranteed to last, but for right now unless you have put a ton of miles on it it’s worth almost as much as you paid.
Latest Answers