is it better to have a simple or compound interest loan?

[atomic]

if some one could giver me a little more info on these two types of loans i'd appreciate it, as in which would be the better to go with. I do know that there are deveations with each but if anybody knows about them I will give you a big high 5 (bam)

[TJ1376]

If you are talking about vehicle loans, you want to stick with a simple interest loan.

In a nutshell, that just means if you pay more than you owe, you paid 400 instead of 370, the extra 30 reduces your principal, which in turn reduces the amount of interest you pay over the life of your loan.

Does that make sense?

TJ

[bloodzombie]

if you want to pay interest on your interest, get a compound loan.

[atomic]

that's what I had originally thought but someone told me something else... just needed to check and make sure I wasn't nuts.

[Santorican]

Quote: Originally Posted by bloodzombie

if you want to pay interest on your interest, get a compound loan.

Correct me if I'm wrong, but don't credit cards have compound loans? That's how most people get stuck with debt

[bigwoofers.net]

Quote: Originally Posted by Santorican

Correct me if I'm wrong, but don't credit cards have compound loans? That's how most people get stuck with debt

They get stuck with debt because they pay minimums.

[bloodzombie]

Quote: Originally Posted by Santorican

Correct me if I'm wrong, but don't credit cards have compound loans? That's how most people get stuck with debt

that and the 18% rate.

credit cards are bad unless you pay them off every month.

[SRT-T3ddy]

compound for a savings account

[Santorican]

Quote: Originally Posted by SRT-T3ddy

compound for a savings account

Wow I really need to find out if my bank has that....