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Paying Extra

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THE SCENARIO I have a car loan at the moment and I'm considering paying extra on it to retire the debt faster. I currently pay \$206.42 every month, with an annual percentage rate of 3.140%. I still owe \$7,638.11. The question: If I were to pay an extra \$65 every month, how much faster would I be paid off than if I just kept with the required payments?
THE SOLUTION This one is fairly straightforward, and has 3 parts:
1. Figure out how long I still have on the loan as-is
2. Figure out how long it would take me to pay off the loan with an extra \$65 in payments every month
3. Do a little subtraction to see how much faster it would be
First things first, make sure the calculator is using 12 Payments per Year. Step 1: The loan with no extra monthly pay-down N: (This is what I'm trying to find) I/YR: 3.145 (The loan's interest rate is 3.145%) PV: 7,638.11 (I currently owe \$7,638.11) PMT: -206.42 (My monthly car payment is \$206.42) FV: 0 (I want to know how long it would take me to pay it off entirely)

If I were to make no extra payments, I'll pay off the loan in 38.97 months.

Step 2: The loan with \$65 extra monthly pay-down First, a little arithmetic. \$206.42 + \$65 = \$271.42. N: (This is what I'm trying to find) I/YR: 3.145 (The loan's interest rate is 3.145%) PV: 7,638.11 (I currently owe \$7,638.11) PMT: -271.42 (If I pay an extra \$65 per month, my payment would be \$271.42) FV: 0 (I want to know how long it would take me to pay it off entirely)

If I were to pay an extra \$65 every month, I'd pay off the loan in 29.27 months.

Step 3: Find the difference

If I pay \$65 extra every month, I'll pay off the loan 38.97 - 29.27 = 9.70 months faster.

What do you think? Would you pay extra on this loan to pay it off in 2 ½ years instead of 3 ¼? Why or why not? Let us know in the comments!