Hey Hackrs, is there any law of formula which regulates ratio of principal vs interest for new car loans or lender is free to set it? I want to do some comparison, but I can’t see this details if I would compare some CU’s or banks.
The exact breakdown may be dependent on your first payment date. Some CU’s may have it set at 60 days while others at 45 days, 90 days, etc. They are still charging you interest for those days and that principal / interest breakdown will reflect that.
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I was able to find calculators, I’m more wondering if it is regulated somehow? Can CU/Bank set for example 70% interest at the beginning?
Short answer is no. Long answer is it depends on repayment and amortization schedule. Most banks use ordinary annuity amortization. That is also what most calculators use.
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