Compare simple interest and fully amortized auto loans side-by-side. See how much more interest you pay with simple interest loans, especially if you pay late or make partial payments.
Simple interest loans calculate interest based on the current outstanding principal balance each day, while amortized loans use a fixed monthly payment that includes both principal and interest. The key difference is that with simple interest, paying late means you pay more interest that month, and partial payments go to interest first. Amortized loans provide predictable monthly payments. Most auto loans today use simple interest, but understanding the difference can save you money.