Hello, I need help with financing.
So I'm a young guy and I just purchased my first car and there's this thing called interest where the bank basically steals my money. Who the F invented this concept, seriously. As a first time interest payer, this is a tough concept to swallow. Next time, I'm paying in full with cash, hopefully. Anyway, I had some questions about the best way to go about paying as little interest as possible.
First of all, can someone explain what principal and interest here are in terms of the statement below it.
I'm making more than I need to make payments. And say, I will pay off the car 1 year early with options a and b below, which one is the best way?
a) just put everything I get into paying the car as soon as i get paychecks and stuff (and keep ~$1000 for savings)? Would that lower each monthly payment (principal??) and thus reduce the interest each month?
or does it not matter
b) just save money in a CD or money market account for about 2-3 years and then hopefully get some interest on that (probably a pathetic amount) and just pay off the car all at once a year early?
I have 6% interest and about 27000 left, only two months in.