[quote=Hatfield]And apologies to joec, I just realized sorta misquoted you. That’s what I get for rereading the thread after posting, and now I can’t edit. So let me rescind some of the words I kinda put in your mouth. Again, apologies.
It is true that late in the loan, you are mostly paying interest. Paying down the loan will still lower the total interest paid, just not as much as it would have earlier in the loan.[/quote]
Heh, that’s good. Having worked professionally IN financial advice, I’d assume I know a little about this topic…I’d also admit to actually loving reading/studying tax strategies so these exercises are good fun for me…
But yeah, if you pay a little more principle each month right off the bat, you will pay considerably less interest, but if you look at an amortization chart, near the end of a loan term, it’s not 0 interest, just a lot less compared to say the 1st 5 years in a loan term.
One thing to also consider like it was mentioned is do you want the flexibility compared to a shorter term, higher payment loan?
As someone who is self employed and dealing with more cash flow issues and high costs to run business, having cash on hand is worth it to probably most business owners than getting rid of their loan payment ASAP.
Add in the chance of layoffs for older employees in general, I’ve always been a bigger fan of just keeping your monthly low to deal with the ups and downs of life.
