How to Calculate How Much You Owe on Your Car
by Melvin RichardsonYou can calculate the amount of money you owe on your car at any point in time if you know the correct formula. You have to take into account the interest rate and the principle balance outstanding. If you decide to pay your car off in full, it's always a good idea to call the financial institution you owe to get the exact amount owed.
Call the financial institution that holds your loan to determine the principal balance owed and interest rate on your loan.
Take the annual interest rate and divide it by 365 to calculate the daily interest rate. Multiply the result by the principle balance owed to calculate daily interest owed.
Determine the number of days since the last statement period ended. If the date of last payment was July 16 and you are mailing your payoff payment July 18 and expect the payment to be received by July 23, then you would use five days in the equation to calculate the interest owed.
Multiply the number of days determined in Step 3 by the daily interest determined in Step 4. Add this amount to the principle balance owed. This will result in your total payoff amount.
Tip
- check Your financial institute may calculate interest based on a 360 day model (30 day periods times 12 months) versus 365.