Finance Questions!

Alright, I bought my truck last march, it was 15k out the door. I paid 5k down in cash, and financed 10k. I financed my truck for as long as I could (5yrs) just incase anything happened I wouldnt have a huge payment, I want to have it paid off in 3 years. My payment is $190 a month and I pay around $250 a month to pay it off quicker. Is this helping me or should I pay the $190 and put the rest as a principle payment?

 

I like to use this: http://www.bankrate.com/calculators/auto/auto-loan-calculator.aspx

 

Anything extra your paying should be applied toward the principal automatically. Then again you may want to double check with the finance co. to make sure that is how they apply the overage.

EDIT:: Christian was faster on the keyboard.....but great minds think alike.

 

I believe it does, just bc I am several months ahead on my payments just bc I have paid more, I just wanted to make sure I wasn't wasting money and not getting anywhere

 

u got that truck for 15k? that seems really good. My next payment is due January 2012

 

15k?! thats goodddd, 1/.2 of a brand new truckk

 

x2

 

Paying ahead doesn't do anything but cut down some of the final interest. You're better off paying extra each payment higher than paying the "next payment". Or so I figured out before. I paid a few payments ahead when I could back "in the day" incase something came up. But now I just pay as much as I can afford or whatever towards the payment.

 

You've got a good plan. Vehicle interest adds up. Paying extra on the principle will save you major money and shorten your payment period for sure. Then you will have your extra monthly income back sooner to spend on some awesome mods!

You are an inspiration. Got a great deal on your truck and are paying down your loan fast. There are many TC members that should follow your lead. Well done!

 

yeah anything over the payment goes to the principle.. I did the samething.

 

or just don't have a loan...pay it all upfront

 

2005, sport model. it had 94k miles, got it for $13,300, tax tag title was $14998. 60 year old man had it, the dealer did all the service on it. It also had a blue camper top, which i sold for $500

 

Mr Tack, I use that same calculator and its very good and easy to use, but, different finance co's and banks use different methods to calculate and you'll get a different result.
but, the bankrate calculator is close and gives you a general idea, I have found it its much easiser to call your finance co. and ask them to calculate a different payment for you, and suppose you want to pay off your loan, did you know you can ask for a lower payoff and sometimes they will give it to you.
A few years ago I owed $6200 on a motorcycle I had financed, I offered a $5000 payoff, they offered a $5800 payoff I took it, they gave me an authorization number for that pay off amount, sent them the check.
But NEVER pay it off without calling them first cause your balance may change as the check is floating in the mail, and always get an autorization number.
Just call them, tell them what you want, they can be very helpful

 

If you are getting ahead and have months that you don't owe for- Then you payment is not going to principle.
You owe 190 a month, pay 250, giving you an extra 60 a month. That means every 4th month you've paid an extra month worth of regular payments.
If your payment was going to the principle-The principle would be reduced and you would owe your normal payment the next month.

If you pay ahead they credit the extra money to a normal payment...so you might stop making payments earlier than planned, but you've still made the same amount of payments as they expected so they got all the money they were going to charge you for interest.


I pay an extra 250 on my mortgage and an extra 150 on my truck loan...and I owe the normal payment every month and then I place the extra directly to principle.

Ditto.

 

Just a cautionary note:

Some years ago I had a car loan, and always made 2 or 3 payments each month. When I was close to having it it paid off, I skipped 2 months and banked those payemnts so I could pay the final balance. The bank considered those 2 months delinquent because they said a payment was required every month, even though I was paid way ahead. They even threatened to repossess the car.

I called the loan officer and got it straightened out, and the "delinquincies" were removed from my credit report. But if I had not had a close, long-term relationship with that bank, it could have created problems.

 

OK. Sorry I can't even reply to this.. really?

 

^thats just silly (your quote, not reply). with most banks it's ok to advance on your payment. that's what im doing. had to borrow 8k over 3yrs, $242 a month. been doing about $300 and will really knock her down come tax return time. now i see your 19, if you don't have any credit, paying it off tooo early can actually (not hurt) but not help your credit score because you wont have a lengthy enough time to show a record. . . or atleast that's the way my bank and finance professor explained it to me. . . so i guess what im saying is yes, definitely pay more than you have to to knock that payment period and interest down, but in the given circumstances don't do anything dumb.

 

yeah, thats what i have heard. I try to pay minimum one month, then pay about 50 dollars more the next. I have credit from my last truck, but i only had it financed for about 10 months before i paid it off. I dont mind paying on mine about 3, but i def dont want to be making payments for 5 like my loan is set up

 

good deal man. i grew up in a family that taught me never to be in debt to the man, so im trying to pay mine off as quick as i can. there are a lot of people that just cant understand that logic. looks like your on the right track. just don't be doing the whole skip a month, pay a month and bullshit like that. . . and where in NC you at man? im 20, from JoCo but go to State, in my sophomore year.

 

yeah, i know what you mean. Thats why i put such a big down payment on my truck, bc its better to sell something an lose money, than keep making payments with money you dont have. I def dont skip payments bc thats when you get into more problems. I hate when people are paid several months in advance so they dont make the payments but then they will get new wheels or somehting.