The penalty on early redemption of a personal loan
In month 9 you still owe $7,954.25. You need to pay that, plus the $250. At that line, you haven't made the payment, the rest of the line with next month's payment due. So you haven't paid the $242.47 in col 4.
The dealership is getting a kickback for having you use a particular bank to finance through. The bank assumes you will take the full term of the loan to pay back, and will hopefully be a repeat customer. This tactic isn't new, and although it maybe doesn't make sense to you, the consumer, in the long run it benefits the bank and the dealership. (They wouldn't do it otherwise. These guys have a lot of smart people running #s for them). Be sure to read the specifics of the loan contract. There may be a penalty for paying it off early. Most customers won't be able to pay that much in cash, so the bank makes a deal with the dealership to send clients their way. They will lose money on a small percentage of clients, but make more off of the rest of the clients. If there's no penalty for paying it off early, you may just want to take the financing offer and pay it off ASAP. If you truly can only finance $2500 for 6 mos, and get the full discount, then that might work as well. The bank had to set a minimum for the dealership in order to qualify as a loan that earns the discount. Sounds like that's it. Bonus Info: Here's a screenshot of Kelley Blue Book for that car. Car dealers get me riled up, always have, always will, so I like doing this kind of research for people to make sure they get the right price. Fair price range is $27,578 - $28,551. First time car buyers are a dealers dream come true. Don't let them beat you down!  And here's more specific data about the Florida area relating to recent purchases: This depends on the loan calculation methodology. If it is on reducing balance then yes. Else not much difference Previous to apply for a home loan, recognize the time of charges, punishment or fee charged by your lending company or bank for defaulting in monthly EMI. Know the dispensation accuse and in case a person decides to control their loan from current lender to a new lender, the present lender will charge consequence or fee for pre-closure of your loan. didn't pay the extra underpayment penalty on the grounds that it was   an honest mistake. You seem to think a penalty applies only when the IRS thinks you were trying to cheat the system.  That's not the case. A mistake (honest or otherwise) still can imply a penalty. While you can appeal just about anything, on any grounds you like, it's unlikely you will prevail. In the US, our standard fixed rate mortgages would show no difference. My payment is calculated to be due on the 1st of each month.  When I first got a mortgage, I was intrigued by this question, and experimented. I paid early, on the 15th, 2 weeks early, and looked at my next statement. It matched the amortization, exactly. Mortgages at the time were over 12%, so I'd imagine having seen the benefit of that 1/2% for the early payment.  Next I paid on the last day before penalty, in effect, 2 weeks late. I expected to see extra interest accrue, again, just a bit, but enough to see when compared to the amortization table. Again, no difference, the next statement showed the same value to the penny. "The underpayment ""penalty"" is just interest on the late payments--willful or not has nothing to do with it.  When they feel it's willful there will be additional penalties." For conversions you do not to be 59-1/2 to avoid penalty. The 5-yr rule thus creates an early withdrawal option if planned well in advance.  See the flow chart in http://www.irs.gov/publications/p590/ch02.html#en_US_2012_publink1000231030 For where I sourced the answer.  Note : I edited to correct my answer. User102008 called me out on my mistake, and rightly so. The dialog is in the comments, where he points out the mistake. Good job, new User. "No. Credit card companies will typically not care about your individual credit card account. Instead they look either at a ""package"" of card accounts opened at roughly the same time, or of ""slices"" of cardholder accounts by credit rating. If an entire package's or slice's balance drops significantly, they'll take a look, and will adjust rates accordingly (often they may actually decrease rates as an incentive to increase you use of the card). Because credit card debt is unstructured debt, the bank cannot impose an ""early payment penalty"" of any kind (there's no schedule for paying it off, so there's no way to prove that they're missing out on $X in interest because you paid early). Generally, banks don't like CC debt anyway; it's very risky debt, and they often end up writing large balances off for pennies on the dollar. So, when you pay down your balance by a significant amount, the banks breathe a sigh of relief. The real money, the stable money, is in the usage fees; every time you swipe your card, the business who accepted it owes the credit card company 3% of your purchase, and sometimes more." The principal of the contribution can definitely be withdrawn tax-free and penalty-free. However, there is a section that makes me think that the earnings part may be subject to penalty in addition to tax. In Publication 590-A, under Traditional IRAs -> When Can You Withdraw or Use Assets? -> Contributions Returned Before Due Date of Return -> Early Distributions Tax, it says: The 10% additional tax on distributions made before you reach age 59½   does not apply to these tax-free withdrawals of your contributions.   However, the distribution of interest or other income must be reported   on Form 5329 and, unless the distribution qualifies as an exception to   the age 59½ rule, it will be subject to this tax. This section is only specifically about the return of contributions before the due date of return, not a general withdrawal (as you can see from the first sentence that the penalty doesn't apply to contributions, which wouldn't be true of general withdrawals). Therefore, the second sentence must be about the earnings part of the withdrawal that you must make together with the contribution part as part of the return of contributions before the due date of the return. If the penalty it is talking about is only about other types of withdrawals and doesn't apply to the earnings part of the return of contribution before the due date of the return, then this sentence wouldn't make sense as it's in a part that's only about return of contribution before the due date of the return. If you withdraw your funds from your 401k and DO NOT mive it into another 401k plan or IRA within 60 days it will constitute as an early distribution which will carry a panlty of 10% as well as have income tax owed on it. It is often the case (more commonly in countries other than the USA) that a fixed-term loan has an early redemption penalty, because the lender themselves will incur a cost for settling the loan early, while a variable-rate loan does not. If this is the situation and you think you might want to pay off the loan early, you should definitely consider the variable rate rather than then fixed rate. "I'm answering my own question because in some sense, I alone know the answer. After the review, HMRC decided to waive all penalties (including the initial £100 penalty for late filing, which I had not appealed against) because ""HMRC may not have informed me"" about the mounting penalties. I had pretty good evidence that they hadn't informed me as there was a software change and immediately after that I got an initial penalty notice followed a day or so later by the further penalty notice.  But I am happy with the outcome, I wasn't going to argue any further!" "Here is a simple loan payment calculator.  If you allow early principal repayment, then you should just be able to plug in the new principal amount to find his new monthly payment (someone please correct me if I'm mistaken). Are you averse to creating a spreadsheet yourself in excel?  I suppose it could become quite an undertaking, depending on how detailed you chose to get with the interest.  Seems like it would be more direct and serve the dual purpose of recordkeeping. It's important to agree in advance whether pre-payments go to principal or go partly to interest (prepaying for periodic amounts not yet due, which are mixed principal and interest).  It's a family loan, so it probably makes sense to allow the prepayments to pay down principal; you don't need to structure your interest income and prevent him from depriving you of interest income (which many bank loans will do).  Allowing early principal repayment is pretty easy to calculate in your own excel spreadsheet, since you just need to know the remaining principal, time outstanding, and the interest rate. Note that if you are a US citizen, then the interest paid to you will be taxable income to you (""ordinary income"" rate).  Your brother will not be able to deduct the interest payments, unless maybe they are used for something like his business or perhaps mortgage.  There is no deduction for just a personal loan. Also, if you instead structured it without interest, then the interest not charged would be considered a gift under US gift tax law.  As long as the annual interest were under the gift exclusion amount ($14,000) then there would be no gift tax.  With no interest and no gift, you would not have tax consequences." Am I eligible for the tax exemption if yes then under which section.  Generally Personal loans are not eligible for tax exemption. Only housing loans from qualified institutions are eligible for tax deduction. As per the income tax act; The house should be in your name. The home loans taken from recognised institutions are fully qualified under section 24B and 80C. This means you can claim Interest exemption under 24B and Principal repayment under 80C. The Act also specifies that loan can be taken from friends/relatives for construction of property and will be eligible for Interest exemption under 24B only. The principal will not be eligible for exemption under 80C. Read the FAQ from Income Tax India. There has to be certificate showing how much interest was paid on the said loan. Further there should be records/receipts on how the money was spent. There is difference of opinion amongst CA. It is best you take a professional advise. You can take out a personal loan for any reason - to burn the money for fun, if you like. But be aware that you owe it back, not your mother, or anyone else. They will come to you for the repayments.