Originally Posted by
Aksannyi
Yeah um ...
I did a spreadsheet with the compounding interest function in Excel and even with one of the lowest loan amounts, after 10 years that loan with the highest rate will have accrued the largest amount of interest.
For reference, that loan is $3,604.73 at 13.25% interest and after 10 years of zero payments, it will have compounded to a total outstanding balance of $12,509.93, which is a difference of $8,905.20.
Compare that to a loan at $11,438.98 at 5.25% interest, after 10 years of zero payments, it will have compounded to a total of $19,081.32, which is a difference of $7.642.34.
Still a lot no matter which way you slice it, but the more of the principle I pay down which is actually what I've been paying now, what small amount of interest accrues monthly plus additional principle, I'm going to save myself a lot of money over the long run. I just calculated out what a $350 payment would do, and that would prevent over $900 of interest from accruing over 10 years. Obviously, the more I pay, the less I will have to pay long term.
I mean, if I were paying minimum payments and only adding an extra $5, yeah, that's not going to help. But when you add a significant amount so that the principle is being lowered, it will make a difference over a period of time.
Another few months though, and that 13.25% shit is going to be gone, and good riddance.