I just made a huge mistake

@ashtonandana

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SoundTikTok sound · Idyllic jazz bossa nova with piano and guitar(1298871)

Why it worked

The video works because it leverages a relatable 'financial mistake' narrative, providing educational value while maintaining high transparency and vulnerability, which encourages audience engagement in the comments.

Summary

The creator explains a financial mistake she made with her new car loan, where she didn't realize it was a simple interest loan that accrued interest daily during a 90-day no-payment period. She shares her experience to warn others and asks for clarification from her audience.

Structure

1Introduction of the financial mistake
2Explanation of amortized vs. simple interest loans
3The realization of the interest charge
4The cause of the mistake
5Call for audience explanation

Call to action

If you're able to explain it in a nice easy way in the comment section, please do.

On-screen text

I just made a huge mistake making my first 406 dollar payment on my 2026 Honda Civic Sport hatchback so let me show you what you the mistake I made so you can't make it too I thought car loans like mortgages were amortized I cannot pronounce that word for my life DEFINITION: An amortized loan is a type of loan where regular payments gradually reduce both the principal and interest, ultimately paying off the debt over a set period. your payments are pretty much set every month so say your payments 406 for your mortgage right you have a set amortization schedule which means the first half of the loan you're paying a lot more towards interest as the principal gets smaller you pay a lot less towards interest and a lot more to principal so we're looking up how much my 406 dollar payment would go towards interest versus principal I looked up the amortization schedule I thought it was gonna be 80 dollars However 218 dollars of that 406 dollar payment went towards interest and I was just like so I called them cause I was freaking out and he said girl it's not an amortized loan it's a simple interest loan and I was like what the is that Simple interest loan A loan where the interest for each payment stays the same for the loan's lifetime. some things online says that your interest stay the same the whole time and so say if I'm paying 80 dollars towards interest and 300 dollars towards principal for that first payment that's how all the payments work In the beginning, a large portion of your monthly payment goes to interest. This is because your principal balance is large. But as you continue to make your payment, the interest amount will decrease, and the interest amount will go down with it. So, as you get toward the end of your contract, more of your payment will go toward principal, and less to interest. Original loan: $21,699 Based on my research, simple interest loans typically accrue interest daily vs. amortized loans TYPICALLY accrue interest monthly they only accrue interest monthly versus simple interest loans accrue interest daily and I did not know that and so I actually within that first 90 days I made a principal only payment but I did not make a regular payment until the end of the 90 day mark and that's why 200 went towards interest because 90 days it accrued interest even though I didn't have a payment due which is a scam in my opinion so my next payment should be a normal payment but yeah I just feel bamboozled I paid my last car off in two years I make all this personal finance content about loans and stuff and I just feel like girl like I somehow just missed that I'll see you in July when I should have a real payment like it should be like hopefully around 80 dollar ish for towards interest but I don't know if you're able to explain it in a nice easy way in the comment section please do if you're gonna be mean about it just don't

Original caption

if i understand correctly, i would basically have to always be ahead 90 days on the loan to be able to not make this mistake again…right? #carloans #newcar #hondacivichatchback #car #loans

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Transcript

I just made a huge mistake making my first 406 dollar payment on my 2026 Honda Civic Sport hatchback. So let me show you what you the mistake I made so you can't make it too. I thought car loans like mortgages were amortized. I cannot pronounce that word for my life. But basically meaning that your payments are pretty much set every month. So say your payments 406 for your mortgage right, you have a set amortization schedule which means the first half of the loan you're paying a lot more towards interest. As the principal gets smaller you pay a lot less towards interest and a lot more to principal. So we're looking up how much my 406 dollar payment would go towards interest versus principal, I looked up the amortization schedule. I thought it was gonna be 80 dollars. However, 218 dollars of that 406 dollar payment went towards interest and I was just like. So I called them cause I was freaking out and he said girl it's not an amortized loan, it's a simple interest loan and I was like what the is that. Some things online says that your interest stay the same the whole time and so say if I'm paying 80 dollars towards interest and 300 dollars towards principal for that first payment that's how all the payments work. Other things online were saying that it's like amortized loans where like it changes over time but it's not as a set schedule. My original loan was 21,699. I had a 4.38% interest rate because I finance with a credit union, do that. But they have 90 days no payments for that loan. And for simple interest loans unlike amortized loans, amortized loans for your mortgage are usually they only accrue interest monthly versus simple interest loans accrue interest daily and I did not know that. And so I actually within that first 90 days I made a principal only payment but I did not make a regular payment until the end of the 90 day mark and that's why 200 went towards interest because 90 days it accrued interest even though I didn't have a payment due which is a scam in my opinion. So my next payment should be a normal payment. But yeah I just feel bamboozled. I paid my last car off in two years. I make all this personal finance content about loans and stuff and I just feel like girl like I somehow just missed that. So yeah, I'll see you in July when I should have a real payment like it should be like hopefully around 80 dollar ish for towards interest. But I don't know if you're able to explain it in a nice easy way in the comment section please do if you're gonna be mean about it just don't.