2007-12-29 12:59:35 · 6 answers · asked by TARA r 1 in Business & Finance ➔ Credit
Sorry I guess I should be specific...
If I owe $33,000 on my car and I pay an extra $200 or if I pay a lump sum say $4000 at one time how does that get applied to my loan and how does that reduce my debt?
2007-12-29 13:06:08 · update #1
You have to decide what you want the money to do.
For example: my wife and I paid and extra $400.00 ever month for 6 months and we had them apply the money to the payments (this way we are 6 months ahead so where safe if we ever can not pay) now the have our extra applied to the end of the note this will save us on interest but will not get us any further ahead on our payments just the end date.
2007-12-29 17:45:51 · answer #1 · answered by Anonymous · 0⤊ 0⤋
1
2016-09-26 21:44:26 · answer #2 · answered by ? 3 · 0⤊ 0⤋
When you send in your payment make sure that it is stipulated that it is for an additional principal payment. Paying down the principal makes what you owe smaller. You pay interest on what you owe and as your balance goes down so does what you pay on interest. Some banks will apply it to where ever they want. That should be in your loan papers. Someone told you that they are paid ahead and can skip if they need to, that is not always true. Each bank and lending institution has their own rules. Read all of your paperwork.
2007-12-29 20:22:45 · answer #3 · answered by kim h 7 · 0⤊ 0⤋
Read your loan papers.
In the old days, car loans were done under rule-of-78, a methodology that gave the lender extra money of you paid off your loan early. Worse, if you didn't pay the entire thing off, they didn't count the payments as having been received until you missed a payment or there was enough to pay the whole thing off. (I put the extra payments in savings until I had enough.)
2007-12-29 13:23:20 · answer #4 · answered by Anonymous · 0⤊ 0⤋
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RE :How do principle payments work on car loans?
Update: Sorry I guess I should be specific...
If I owe $33,000 on my car and I pay an extra $200 or if I pay a lump sum say $4000 at one time how does that get applied to my loan and how does that reduce my debt?
Follow 8 answers
2017-03-26 13:52:06 · answer #5 · answered by Broderic 6 · 0⤊ 0⤋
Sounds cool
2016-07-30 10:58:03 · answer #6 · answered by ? 4 · 0⤊ 0⤋
I often end up posting the same question on other sites
2016-08-26 14:50:41 · answer #7 · answered by Anonymous · 0⤊ 0⤋
They reduce the amount of principal you owe.
Not sure what you are looking for.
2007-12-29 13:04:06 · answer #8 · answered by Anonymous · 0⤊ 1⤋