If you own a financed vehicle and wish to trade it in for a new one, then it is of prime importance to know your loan balance before you make any move further.
What is Loan Balance?
It is an amount that is still pending to be paid on your loan. Every loan you avail of will have a loan balance unless and until the entire loan is paid off. The loan balance amount changes on a daily basis because of the interest that is added on a daily basis.
Outstanding Loan Balance
In most cases, this is not mentioned in the statement. It refers to a past due amount. In case you are late on your loan payments then you will be seeing this amount. In its entirety, it is the loan amount which is due from the past.
Best Loan Calculators
If you are unable to find your loan statement, then you will need to know a few details on the procedure to calculate your loan balance. Make a use of :
- Traditional loan calculator and input the remaining time left on your loan
- Your monthly payment and
- Your interest rate.
The above calculation will give you an approx loan balance estimate. Once all the figures you get are matching with each other, then you have calculated your loan balance incorrect. A personal visit to your lender or their official portal will give you an accurate statement of your loan balance. These are some of the portals that can be of great help to you:
- Cars.com Calculator
- Bankrate.com Calculator
Point of Advice
As usual, the best way to avoid loan balance is to make any vehicle purchases or trade it off for a newer one, only in case you can pay it off comfortably. The grass may always be greener on the other side, but ruining your credit score for the sake of a new ride isn’t a wise financial decision.
So, keep in mind all these relevant points whenever this kind of situation takes place.