# The Amortization Experiment

I should call this "Fun With Amortization Tables".

**Cliff Notes...**I'm paying off my new car in less than one year and saving $10,000 in interest.

An amortization table is a document that tells you how much of each loan payment goes to interest and how much goes to principal.

On April 17th of this year I got a new car...new to me...2021 Rav 4 with about 26,000 miles on it.

I asked the lender if I could get an amortization table from them and they said, "we don't provide those"

I think I know why.

Here's the amortization table for the first year of my new car...

My first payment was scheduled for May 28...40 days after I took delivery of the car.

As you can see if I paid it off in the "normal" way, after one year I will have paid back $5969.16 but only $2695.21 had gone to principal.

I didn't like that.

**So I started to do some figuring.**

How could I use the car to pay off the car faster? (Think Uber, Lyft, Instacart etc)

I started looking at the PRINCIPAL column.

If I earned about $225 every week, using the car, in just 12 weeks I will have knocked one year off the loan.

After those first 12 weeks, I'd need to earn about $260 a week to get rid of another year in 12 weeks.

The next 12 weeks the average per week would need to be about $300.

Doing it that way **I'd have the car paid off in approximately 72 WEEKS...instead of 72 MONTHS.**

I LOVED the sound of that. (who wouldn't!?)

See why car lenders don't provide amortization tables?

But I really liked the idea of having it paid off in less than a year.

So I sharpened my pencil and wondered...how much would I have to pay EVERY DAY to pay it off in a year?

I took the balance and divided it by 365.

The number was $64.80.

If I was able to earn just $65 per day, the car would be paid off in a year....without interest... BUT that's not how these things typically work.

Interest is accruing every day.

But since my first payment wasn't due for 40 days after I bought it, I started paying $65 every day.

**Every day is different but it usually takes me 1-3 hours to earn $65 with the car. **

And that's not always in a row.

I work from home normally so I wait for the $20+ gigs to pop up and take those.

I started paying back $65 per day because I didn't know if my first required monthly payment on May 28 was going to change.

It was scheduled to be $497.03 but by May 28th I will have already paid back $2600.

I didn't know if they would still require that $497.03 or change the amount due on May 28th or the due date itself.

I got my answer on the morning of April 25th when the due date changed to June 28th and the payment amount changed to $539.06.

**At this point I had made seven, daily $65 payments. ($455)**

Since it appeared that if I continued to make daily payments I'd never need to make the big payment ($497.03) I did some more pencil sharpening.

I figured out that if I added just $10 to my daily $65 payment, the car would be paid off in less than one year....about 20 days short of one year.

So on April 25th I started paying $75 per day.

This morning my required monthly payment for, now June 28th, is back to $497.03.

But if I keep making $75 daily payments that date will keep moving farther out. (or is it further?)

**On March 27, 2025 I'll have a 4 year old paid off car. Sounds good to me!**

Of course, I have several advantages over the typical person with a car loan.

**-No kids.**

-No spouse.

**-No traditional job.**

-Experience with side hustles where earning $75 is pretty fast and I get paid the same day.

**And it doesn't hurt that I'm attractive, charming and witty...and of course humble.**

So rather than dismiss the idea of paying extra on your loans, I hope you'll adapt this idea for your own situation and circumstances.

Get an amortization table for your loans and run different scenarios.

**Just one extra payment PER YEAR...applied to principal...can dramatically speed up most loans....knocking years off of a mortgage and months off a car loan, saving you hundreds or thousands of dollars in interest.**

I'm saving about $10,000 in interest.

**So don't focus on what you can't to and do what you can.**

Let me know how it goes for you.

I'll edit this article as the year goes by.

**Update #1 - May 17, 2024** - Today marks the 30th day I've made a payment on the car. One month down. I've paid back a total of $2180 of which, approximately $1920 went to principal and $270 went to interest.

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**Update #2 - May 28, 2024** - Today was the day my first payment was originally due. (40 days after purchase) Since I've been making daily payments, the "next payment" is scheduled for August 28th. I did forget to make a payment on May 21 but other than that I've continued to make $75 daily payments. So far I've paid back $2930...$2500 of that went to principal.