Your Interest Rate Is Costing You Thousands of Dollars

The interest rate the lender charges is a percent of the total amount loaned. Your total amount loaned is called the principal loan amount.

principal loan amount definition

It’s important to remember every car payment you’re making isn’t all going towards your principal amount, but to pay the lender for letting you borrow that money.


Mr. Borrower owes $20,000 on his auto loan with a 10% interest rate. Mr. Borrower’s monthly car payment is $424.94. After five months, Mr. Borrower’s paid $2,124.70 towards his auto loan. But a staggering $811.63 of the $2,124.70 has gone towards paying the lender, bringing Mr. Borrower’s total auto loan amount down to only $18,686.93.

If Mr. Borrower has a 60 month loan term, he will pay the lender almost an extra $5,500 on top of the $20,000 he owes. Over the course of one year, Mr. Borrower has paid $1,853.93 in interest costs.

See this breakdown of what every individual auto loan payment costs Mr. Borrower here on this amortization table. This tool is also helpful to see what your auto loan costs you.

The interest rate is applied to the total unpaid portion of your loan or bill. It’s important to know what your interest rate is, and how much it adds to your outstanding debt. If your interest rate adds more to your debt than the amount you are paying, your debt could actually increase even though you are making payments.

What are ways to save when you have high interest rate like Mr. Borrower’s?

Refinance for a lower rate. Services like rateGenius don’t charge you to refinance your auto loan. Or overpaying on your car payment each month will save you money, because the interest charged each month is only on the principal loan amount.

Have questions about your interest rate? Comment below or call us. 1 866 728 3436.

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INFOGRAPHIC: 5 Signs of Tire Wear

Do you know what signals tire wear? Have you noticed bulges on the sides of your tire, low PSI or tread wear? These are all signs it may be time for a new tire. Don’t get caught in rush hour (like me) with a flat tire.


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VIDEO: Is a Bank or Credit Union Better for You?

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Financial & Auto Trends in Texas: Travis & Williamson County

Your credit history and  score mean the difference between a bad, good and a great interest rate. FICO credit scores are the most widely used scores for lenders. Because we are in the line of business of saving people money on loans and interest, the FICO score is a big part of that. Did you know your payment history and amounts owed on credit make up 65% of your credit score?

We’ve looked at multiple factors including interest rates, credit scores and age relating to autos to discover trends relating to Texas and Austinites.

We recently took a look at the FICO scores for our home state of Texas and compared them to our home counties of Travis and Williamson county. Some highlights include:

  • Travis Country residents see an average 4.35% rate drop when refinancing their vehicle.
  • The Chevy Silverado is the most refinanced vehicle.
  • The older generations have better credit scores in Williamson County than the rest of the state.

How do you compare? Do you have a part of the country you would like to see specific numbers on? Tell us in the comments!

Auto Refinance Texas Travis Williamson

Use this infographic!

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INFOGRAPHIC: How Much Does Your Car REALLY Cost?

So, you bought a car? Are you happy with your car payments? Did you consider everything you have to pay for with a vehicle besides the final sales price? Gas, maintenance (oil changes, car washes, etc), insurance payments, interest rates. Did you know interest is accrued on a daily basis for your vehicle loan amount? Did you even know your vehicle insurance premium is partly influenced by your credit score?

Check out this infographic breaking down the cost of your vehicle.


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First Quarter National Auto Trends

Q1 2013 vs Q1 2014. Last week, Experian–a major credit reporting agency–released financially-related auto data from the first quarter of 2013 compared to the first quarter of 2014. Take a look at the infographic we created with some national auto trend data.

InfoGraphic-Auto Trends

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VIDEO: Leveraging Your Credit, Splitting Payments & Budgeting Tips


This video segment is from the main video segment from our financial education seminar we hosted covering credit and budgeting tips. See our credit blog series covering credit for more useful information.

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VIDEO: What Does Your Interest Rate REALLY Cost You?


This video covers the actualized cost of owning your vehicle, interest rates and simplified appreciation vs depreciation on certain big financial transactions. The segment you’re viewing was taken from our main financial seminar video.

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VIDEO: Credit Composition, How to Use Credit & How Poor Credit History Affects You

This video segment is from the main video segment from our financial education seminar we hosted for Austin-area residents. In this portion, guest speaker National Credit Educational Services Founder George Cole speaks about the makeup of your credit score, how to responsibly use credit to build your credit score and history & how your life, including the insurance rates you pay and employment, are all affected by a negative credit score and history.

See our credit blog series covering credit for more information.



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5 Important Questions to Ask When Choosing Health Insurance


With health insurance being an extremely popular topic for the last few months, we put together a list of the important questions to ask before selecting a plan. We understand enrolling for health insurance can be daunting. Your health is what keeps you alive, active and happy. Whether you’re obtaining health insurance for the first time or are familiar with enrollment, these questions will help you make a comfortable decision.

Have more questions for us? Comment below, or send us something over Facebook and Twitter.

What are my options?
Knowing which plan you’re eligible for first will help you pick the best plan for you. If you go to, you can plug in a few details about your age, location and health status and get a list of public and private options to consider.

What benefits are provided?
Check your benefits before selecting an offer based on the appealing lower price. Health insurance generally follows the “you get what you pay for” guideline. Expensive health insurance plans come with lots of fully covered benefits, whereas budget plans offer only select services that may require out-of-pocket costs if you actually use them. The cheapest plan isn’t always the right option for you.

What doctors can I see? Can I use my current doctor?
Insurance companies contract with certain doctors to control costs. If you’re switching insurance providers and have a current doctor, make sure you can continue to see your current doctor.

How much will I pay?
The price of your insurance is determined by your premium, deductible, co-pay, coinsurance and/or out-of-pocket limit. See our short video covering these common confusing health insurance terms. Consumers should also compare rates with more than one company. At rateGenius, we work as the broker for you with nationwide insurance providers in order to find the most competitive rates with everything you’re looking for in a plan.

Do I trust this company?
Asking your friends and family for referrals is great, but many consumers aren’t aware they should consider the insurance providers AM Best’s score before choosing that provider. The AM Best model scores insurance providers based on their financial strength and creditworthiness. You can also research the company’s BBB rating. These are important sites to look at to determine if the insurance provider has the financial strength to pay claims and how they conduct business.


rateGenius Insurance: 1 855 339 9315
rateGenius Vehicle Refinance: 1 866 728 3436

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