# Car payments interest/principal

Is it normal that my payment is always 75-80% going to interest and not much to principal? I've made 32 payments and have paid about 20k but only 7k had gone to principal. The loan was for 21k at 22% yaikssss.

Emily Maracle
Emily Maracle is a car insurance specialist living in New York. Originally from the Pacific Northwest, she has a degree in English Literature and a background in customer service. She enjoys cooking, gardening, and living sustainably. In the future, she can't wait to upgrade to a hybrid or electric car.
Based on your interest rate and how loan payments are structured, it is very common to see only a small amount of your monthly payments apply towards your principal.
When looking at a car loan, principal is the amount you originally agreed to pay back for vehicle’s value, or the \$21,000. The interest is the cost of borrowing that amount, which includes your rate of 22%.
Every time you make a car payment, your lender first applies it to any fees you may have and current or past due interest. Any remaining amount after that goes to your principal.
If you’d like to try and lower your principal amount, confirm how much your monthly interest payments are with your lender.
Most monthly interest payments are calculated by multiplying your principal balance by your APR and dividing it by 12.
Based on your loan amount of \$21,000 and an APR of 22%, your monthly interest payments are \$385.
21,000 x 22% = \$4,620. If you divide this by 12, you get a monthly payment of \$385.
Once you know your monthly interest payment, you could try to pay extra on your loan every month. Most lenders automatically apply excess payments to your principal balance, but be sure to inform them in advance. Some lenders do require that you tell them how you want your payments to apply to your loan balance.
Even if you can’t afford to put much extra towards your loan every month, anything counts and can help you pay off your balance faster.
If paying extra isn’t an option, consider refinancing your vehicle; you might be able to lower your APR. You can extend the length of your loan for cheaper monthly payments, but this does increase the amount you pay on the vehicle in the long term.