A car loan balance of $10,000. I paid $5500 on the loan. Two months later, I was unable to make a payment. Shouldn't the $5500 cover me if I'm late two months later? I should at least be paid up for the next 12 months, right?
2007-04-08 07:28:51 · 7 answers · asked by pattylovecakes 1 in Business & Finance ➔ Credit
I have found that it depends on the loan. I have had loans that I paid extra on the monthly payment and ultimately found I had several months of no required payment as they had applied the extra payments to future payments, but I have had loans also that simply applied any extra payments towards the principal if the loan. The best thing to do is to contact the compnay who holds the loan and ask them.
2007-04-08 09:27:30 · answer #1 · answered by WallyWombat 6 · 0⤊ 0⤋
It depends how that payment was made. Was that payment a principle payment ( directly to the balance) or was it made to future payments?
If you made the principle payment, you still need to made your monthly payments. You reduced the amount of interest that you will pay on the remaining life of the loan.
If you made future payments, you do not have to make any payment until the amount has been exhausted, but you will be pre-paying your interest.
The principle payment saves you money in the long run.
The future payments basically pre-pay and only give you a break from payments for a period of time and there will be no cost savings.
2007-04-08 07:40:53 · answer #2 · answered by Bugman 2007 3 · 1⤊ 0⤋
No, unfortunately creditors don't look at loan payments that way. You can make the large payment on the car note and then ask to refinance. Also, if you really like the car you can make a lease arrangement and make payments for a certain period of time and then have your lease agreement refinanced into a purchase agreement. In some situations you can pay less for the car. But they don't view large payments as future payments.
2007-04-08 07:37:56 · answer #3 · answered by Amy V 4 · 0⤊ 0⤋
Do you have a coupon book or are you making payments from a monthly statement? If you're using individual payment coupon, send the payments as separate installments (even though you're making more than one at a time). If you're paying through a statement (my current car loan is like this), it will probably show you as having a past due balance and that's bad. You need to call or contact your bank or finance company and explain it to them.
2007-04-08 07:39:54 · answer #4 · answered by Resident Heretic 7 · 0⤊ 0⤋
It depends on how you classified the $5500 payment. If it went on the record as regular payments, then it would have covered quite a few future payments. If you classified it as payment on the principal of the loan, and not regular payments, then your regular payments were due as usual. You need to call the bank and get it clarified.
2007-04-08 07:37:47 · answer #5 · answered by Anonymous · 1⤊ 0⤋
It's helpful to pay ahead since you are lowering your balance and the amount of interest you will be charged. Some companies would consider that your payment would not be due for a long time, other companies do not. You'll have to read the fine print of your agreement to see which method the company you are using goes by.
2007-04-08 11:25:11 · answer #6 · answered by Mariposa 7 · 0⤊ 0⤋
no because its a loan... any payments you make early is great but never late... you still owe them...if you can't make next month better call and let them know... early payments does not compesate for late ones... sorry
2007-04-08 07:37:21 · answer #7 · answered by lala15 3 · 1⤊ 0⤋