Tuesday, March 13, 2007

My Car Financing Company Hates Me!


The reason it hates me is because I'm paying my car off earlier than the loan period. The past three months I've made $500 payments instead of the originally $198 specified in the original loan agreement. I'd been paying more off anyway, so my minimum payment had been going down and due farther into the future. They don't want to lose any of that interest. So a month ago my minimum payment was $117 and not due until July. I went ahead and paid $500 again at the beginning of March. I check on-line to see when my next payment was -- September and then they only wanted $11. They really don't like me. We got the $1000 security deposit refund back and I paid another $900 this week toward the car. I just checked on-line (my loan isn't supposed to be paid off until September 2009), and my next payment due is $97....in February 2008! For them to make their money, they want me to wait a whole year to make my next payment! It's surprising how much you can save by just paying a little more than the amount due, even if it's just $10-$20, because you then aren't paying interest on that portion. Once my income tax return comes back I think I'll be able to pay off the whole amount -- then they'll really hate me.

5 comments:

KMK said...

I'm sure you know this, but sometimes there is an early repayment penalty. Not a reason not to pay it off but you might get an unpleasant surprise if you aren't expecting it.

NCN said...

You might want to specifically mark the check: For Principal ONLY. Some companies will simply hold the money in a separate account, and not apply it to the loan.. all loans are different... I'd make super sure that your not going to get hit with an interest charge at the end...
NCN

Bianca Bizarro said...

When I took out the loan I specifically asked if there was a penalty for paying it off early, because I always pay my cars off before the end of the loan period. They assured me that it would not be a problem, and since I've paid off two other cars early without a penalty, I figure this one works the same way. Thanks for mentioning it though because I know some loans are like that.

db said...

HAH!!!! Good for you! I did the same thing at the beginning of my debt blitzkrieg and they hated me too. I loved the day I got my car title in the mail.

Keep sockin it to them.

db
www.debtblitzkrieg.com

change is a good thing said...

Great job, I did the same thing! You will be amazed how much money you will save by paying it off early!