Car Loan Amortization

A loan amortization schedule is a very helpful tool when trying to figure out how to make payments on a car you are looking to buy. One of the most important factors is how long you are taking the loan. Many people take loans for a longer period because at first glance it would appear easier to pay, as you are paying less each month. What not everyone takes into account is the interest that you have to pay. The longer the loan, the longer the interest has to build up. For my $4,495 Ford Taurus, if I was to take a loan for 2 years the cumulative interest would only be $189.68. If I was to take the loan for the maximum loan period, about 7 years, the interest would come out to $666.07. If you can, I would recommend buying the car with cash rather than taking a loan because you can save the money spent on loan interest.