Hopefully, my question doesn't sound dumb, because I'm not a finance guy.
Suppose I have a 100k loan, and the monthly payment is 1k.
My loan payment goes 600 to interest and 400 to pay down principal.
Next month, the total payment will still be 1k, but the distribution going to interest will be slightly lower.
Now, suppose I pay of most of it at once. Suppose I pay 90k this month, leaving me with a 10k left on the loan.
My monthly payment will still be 1k. But should most of that next payment go to principal and very little going to interest? Or is it still going to be roughly the same distribution as last month?
I'm asking, because people keep telling me that it's going to still be roughly 600 Interest and 400 principal. I'm trying to understand that. Wouldn't that mean I'm paying 600 interest/month when I only owe them 10k? Isn't that a huge interest rate? I've been told this twice, but it just doesn't make sense to me. Does that mean that paying off that 90k is harmful, because it'll mean I'll be paying a huge interest rate for what I still owe?
In my opinion, it would make sense that since I owe very little, most of my 1k monthly payment would go to principal, because I shouldn't have to pay that much interest?