Car loan question

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  #1  
Old 01-11-05, 09:21 AM
The 8th Wonder
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Car loan question

I bought a brand new vehicle. I financed through jeep dealership. A 4 year loan at 5%. The amount financed was 15,000. My payment is something like 350.00 per month. Every month I pay $400 instead of the minimum payment. My next months payment then shows to be $10 less each month. Is my extra money that I pay going towards equity? Am I helping my self by paying extra? Were does the extra money that I pay go?
 
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  #2  
Old 01-12-05, 04:09 AM
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you should contact the lender about the terms of the loan as they could vary and to make sure there is no penalty for paying the loan off early.
usually the extra you send in each month goes toward the balance of the loan after paying the interest on the loan per year, in however long it takes to pay the loan off.
again you should contact the lender about the terms but if it is like mentioned above paying 400 a month for the life of the loan would pay off the loan 6 months early and save you about 186 dollars in interest.
 
  #3  
Old 01-15-05, 02:44 AM
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call your financial institution and ask them how to make additional payments. Often your best bet is to send a separate check.

Your extra payments are going towards the loan, they are just trying to get you back on your payment schedule by saying your monthly bill is less. Eventually you wont have anything to pay for a month, though you should continue paying to get the principal down. I'd also verify thatthere are no prepayment penalties.
 
  #4  
Old 01-27-05, 11:29 AM
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You want to make sure that your loan is a simple interest loan and not rule of 7/8s. Most loans these days are simple interest though. You should contact your lender to ask how to make your extra payment to principal and not to interest. As the other person stated... You may need to write a seperate check.
 
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