I think I might have gotten ripped off by the dealer and/or lender. Part of my payment each month (about $100) goes to interest. So far I have paid over 3k in interest alone. I THOUGHT that the rate was 8.7% and I thought it was calculated by adding the amount borrowed plus the percentage rate times the amount borrowed and then that total was divided by the number of payments. I hate to confess my ignorance on this but I believe my other car loans were figured that way. Now it looks like my effective interest rate over the life of the loan will be 31%! That cannot be right.
I am confused and hopelessly ignorant, apparently.
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