Making the Numbers Work
Recreational product loans obtained through bank dealer finance centers are similar to mortgage loans in the method how they are calculated. The major difference is that they are considered open loans, where there is no prepayment penalty. In fact, we encourage our clients to repay loans early thus saving considerable accumulated interest amounts over the course of the loan. This makes more sense when you consider that it is a reducing principal loan where interest is applied on the outstanding principal, calculated daily and applied at the payment interval, which is usually monthly. With that in mind, it is always advantageous to pay off the largest amount of principal as quickly as possible.
In order to determine what the scheduled monthly payment amount is for any given loan amount calculated over a scheduled amortization period (years) on a contract with a rate guaranteed for a specified term, simply input the amount of money you wish to borrow, including taxes and fees (total amount) with the amount of your total down payment including deposit (amount down) and the annual interest rate (interest rate).
