I am paying 15% interest what is the best way to do this should I put the money in the bank and withdrawal monthly payments out or if I put a lump sum down would it lower my monthly payments I want to know the best way thank you
2007-01-26 02:01:01 · 3 answers · asked by Anonymous in Business & Finance ➔ Personal Finance
By all means if you can make a lump sum payment. Make sure they apply it to principal, not just put it into limbo and then apply towards monthly payments. Some car loan companies do that. When you apply it to principal, you next payment will be due at the same time as usual, and your monthly payment will be the same, but you will pay off your loan sooner. And the savings will be great, it is the same as if you deposit this money into saving account paying 15% and tax free.
2007-01-26 02:55:43 · answer #1 · answered by Alexander K 3 · 0⤊ 0⤋
If you put a lump sum down, it's not going to help you as far as lowering your monthly payments or anything but what it will do is keep you from paying as much over the life of you loan. If you send it as a lump sum be sure to tell them that you want it to go towards the principle. This means that you will be paying less interest in the long run.
2007-01-26 10:07:14 · answer #2 · answered by anicarelaford 2 · 1⤊ 0⤋
If you can physically walk into the bank with your payment, put down the lump sum and ask them to apply it to your prinicpal. You'll still have to make monthly payments as you are, but at the end of the loan, you'll get a refund on the interest.
2007-01-26 10:11:05 · answer #3 · answered by zippythejessi 7 · 0⤊ 0⤋