I have a question: I have an auto loan and every month I pay way more than what is do. It all started out w/ my first payment. The payment due was $300 and I paid $400. The next month I got the bill and it said that only $200 was due? So I sent them $600. The next month the bill came and it said that -0- was due? I still paid $600. Does this mean that they are not applying my extra money to the principal of the loan? Is this how they discourage people from paying extra by stating on the next bill that they don't owe anything (if you doubled your payment the previous month) so that people won't send anyting until the following month, hence, falling back to their original payment schedule? I'm confused...I'm just trying to hurry up and pay this car off and avoid some of that 19.81% interest rate!
My mortgage has a line for extra principle, I don't know if you have that with your car payment. As far as I know you should be able to pay double payments, reducing the payment time to less than half...maybe a five year loan down to 2.5???
Keep on doing what you are doing, much easier with a coupon book. You get the 0 bill every month send in any amount and as time goes on you will have that car paid for in no time. Your payments are being applied.
I have an auto loan with my credit union (7% for 60 months), and it will be paid off in 15 months or so. All the extra I pay over my payment goes to my principle. I think that that particular bank is hoping to con people into exactly what you said, thus making lots of money in interest!!
I have done the same as you with my auto loan. I have paid much more that the amount due each month. They send me a statement similar to yours letting me know how much is due in a particular month. Any amount not owed, but is paid anyway, is being applied to your principle. They let you know that you have a credit and nothing is due if you don't want to pay that particular month. However, if you don't continue to make payments anyway, they will earn the maximum interest on the loan. You are doing just fine. KEEP PAYING! My loan will be paid in full next month (eight months early). I have saved a lot on interest. Good luck!
That is exactly what they are doing. Sharks. Capital one does the same thing. You must have to make sure your contract doesnot have a early payment or payoff penality. You go girl. I am gonna start sending in mega chunks to household soon. roni
You need to send a letter stating exactly how any payments beyond the amount due should be applied. I would send it certified, return receipt. My bank TRIED to do the same thing, and the rep acted stupid about it.
Commerce? I was thinking of joining them. They are the latest thing here in Philly with being open 7 days a week and opened evenings. roni
Years ago I worked in the department of a bank where car notes/house notes were sent in. The way I recall it working was just as stated in the original post. Any extra was applied to the next months payment unless specifically stated on the memo line of the check to apply X to monthly payment, balance to principle. My experience when we opened the mail was this ~ it the coupon amount matched the check exactly the check was sent on to deposits and the coupon was scanned. If it did not match it was sent to me to enter the payment manually and make "new coupons" which reflected the normal payment (principle + interest) and a separate coupon for principle only). Since I'm going through a mortgage process right now, my understanding for this type of principle only payment it must be a separate check (at least with this lender) and must be received in their office by a certain date of the month or it will be considered the next months payment. Hope this helps you or someone.
Doing the same thing. Of course it's going to be hard in a couple of months if I get approved for my mortgage loan, but the less I owe those people in the long run will be better for me!
Hello MP$40 Send your payment for the usual amount owed. Then send a separate check for the amount you want to put toward the principle. DO NOT DO THIS IN THE SAME ENVELOPE! Just to make sure write principle or something on the memo field of your check and enclose a letter stating this. Good Luck MikeE MP$40 wrote:-------------------------------I have a question:I have an auto loan and every month I pay way more than what is do. It all started out w/ my first payment. The payment due was $300 and I paid $400. The next month I got the bill and it said that only $200 was due? So I sent them $600. The next month the bill came and it said that -0- was due? I still paid $600. Does this mean that they are not applying my extra money to the principal of the loan? Is this how they discourage people from paying extra by stating on the next bill that they don't owe anything (if you doubled your payment the previous month) so that people won't send anyting until the following month, hence, falling back to their original payment schedule? I'm confused...I'm just trying to hurry up and pay this car off and avoid some of that 19.81% interest rate!
