Peoplefirst question
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Peoplefirst question
I just got in my loan package from people first and actually read the fine print. It says that "each payment received shall be credited first to interest and remainder to principle". It is a simple interest loan, but does this mean that all my payments will pay off only the interest then when the interest is paid off, then they will start paying off the principle?
Hypothetically speaking, if the total interest owed on the vehicle is 10,000 and payments are 500, does the above statement mean that the first 20 payments will go to pay that interest and not a penny to principle?
This really sucks if it is the case.
Hypothetically speaking, if the total interest owed on the vehicle is 10,000 and payments are 500, does the above statement mean that the first 20 payments will go to pay that interest and not a penny to principle?
This really sucks if it is the case.
Registered User
Joined: Aug 2002
Posts: 81
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From: LI, NY
this is true, but it is how all loans work. They make you pay off the interest first as when the principle is paid, you own the car. However, you can pay off the entire loan theoretically on the first day and pay all towards the principle.
Registered User
Joined: Jun 2002
Posts: 98
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From: SC
Yeah
They always have the early payments going towards interest. I'm financing through peoplefirst. How long did it take you to get your check package? I gave them the OK to get on it last Saturday. I can't believe it takes that long to get it.
No, it doesn't work that way unless you go to a loan shark. The payments will pay a lot of interest at the begining because your principal is higher. The interest is not payed off at the beginning or is it spread out evenly over the life of the loan, the interest is calculated on a daily basis usually based on the pricipal which is at the beginning on a 30K loan at 5% you will be paying roughly 566 of which about 440 will be principal and 125 will be interest as the life of the loan goes on the interest gets lower and the principal goes higher. After 2 years your interest will about 80 and the principal about 480 per payment at which point your principal left on the loan is about 18K.
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Westpak is correct, it seems that at first all your paying is interest
because of your principle amount. As a few months go by and the principle on the loan gets less and less, more of the monthly payment will go towards the principle and less towards the interest. You are paying interest computed on a daily basis according to your principle owed.
because of your principle amount. As a few months go by and the principle on the loan gets less and less, more of the monthly payment will go towards the principle and less towards the interest. You are paying interest computed on a daily basis according to your principle owed.
Westpack is right. Each payment statement you receive has two components to it: Principle and interest.
Say you finanaced 30K. Your car payment is say $500. Of that $500, some will be principle and some will be interest. On your first payment however, you are paying interest on the full 30k so it will be higher.
On your second payment, you will have already paid off some principle when you sent in the check from your first payment. SO now, your principle is down to say $29,700. You now are paying interest on THIS amount, which will be a little less than the interest you paid on the full 30K on the first payment.
Sounds confusing but I hope that made sense.
Say you finanaced 30K. Your car payment is say $500. Of that $500, some will be principle and some will be interest. On your first payment however, you are paying interest on the full 30k so it will be higher.
On your second payment, you will have already paid off some principle when you sent in the check from your first payment. SO now, your principle is down to say $29,700. You now are paying interest on THIS amount, which will be a little less than the interest you paid on the full 30K on the first payment.
Sounds confusing but I hope that made sense.
Charter Member #49
Joined: May 2002
Posts: 447
Likes: 0
From: Austin, Texas
Re: Peoplefirst question
Originally posted by birdman63
I just got in my loan package from people first and actually read the fine print. It says that "each payment received shall be credited first to interest and remainder to principle". It is a simple interest loan, but does this mean that all my payments will pay off only the interest then when the interest is paid off, then they will start paying off the principle?
Hypothetically speaking, if the total interest owed on the vehicle is 10,000 and payments are 500, does the above statement mean that the first 20 payments will go to pay that interest and not a penny to principle?
This really sucks if it is the case.
I just got in my loan package from people first and actually read the fine print. It says that "each payment received shall be credited first to interest and remainder to principle". It is a simple interest loan, but does this mean that all my payments will pay off only the interest then when the interest is paid off, then they will start paying off the principle?
Hypothetically speaking, if the total interest owed on the vehicle is 10,000 and payments are 500, does the above statement mean that the first 20 payments will go to pay that interest and not a penny to principle?
This really sucks if it is the case.
That the way all loans work, nothing special about PeopleFirst loan. A portion of your first payment goes toward interest, but only for the interest between the starting date of your loan and the first payment. The rest of the payment apply to priciple. So, after each monthly payment, the principle get smaller, so does the interest for the subsequent month. With each passing month, more and more of the monthly payment goes toward priciple, eventually, the loan is paid off.
This topic should be covered in advanced high school math or first year of college for Business major.
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and I even have a BBA in Accountancy... I know how to figure these things out, but was just wondering if Peoplefirst had a special program that screwed you for all the interest up front before principle is touched. Guess I'm a little paranoid about using an internet funding company, but the rates are good.
btw - they overnighted me the check/package. Signed up labor day weekend and received the package on Tuesday.
THANKS for all yall's help!
btw - they overnighted me the check/package. Signed up labor day weekend and received the package on Tuesday.
THANKS for all yall's help!
Charter Member #49
Joined: May 2002
Posts: 447
Likes: 0
From: Austin, Texas
Originally posted by birdman63
and I even have a BBA in Accountancy... I know how to figure these things out, but was just wondering if Peoplefirst had a special program that screwed you for all the interest up front before principle is touched. Guess I'm a little paranoid about using an internet funding company, but the rates are good.
btw - they overnighted me the check/package. Signed up labor day weekend and received the package on Tuesday.
THANKS for all yall's help!
and I even have a BBA in Accountancy... I know how to figure these things out, but was just wondering if Peoplefirst had a special program that screwed you for all the interest up front before principle is touched. Guess I'm a little paranoid about using an internet funding company, but the rates are good.
btw - they overnighted me the check/package. Signed up labor day weekend and received the package on Tuesday.
THANKS for all yall's help!
I got the loan from them too. I spent 2 days checking them out on the internet to see if there're any bad press about them. Nothing but good info. They are the Preferred lender for American Express and AAA members. Also, there are no prepayment penalty, so if they are playing trick, we always can pay off the loan. I used the loan calculator, the monthly payment matched the figure from PeopleFirst.
Also, check with your dealer first before your car arrive if they are any personal problem with PeopleFirst. My dealer accepted the check like cash. However, there was a post here last week, Courtesy Nissan refused to do business with PeopleFirst due to previous problem, even not accepting a cashier check from PeopleFirst. So PeopleFirst advised him to get the loan from the dealer when pick up the car, and then immediately pay it off by refinance the loan from PeopleFirst, same interest rate as new car. I think they have a great business model going with customer satisfaction in mind. Good luck with your Z.
Registered User
Joined: May 2002
Posts: 105
Likes: 0
From: Ft Laurderdale
you won't have any problems wityh them
unless you don't make your payments. But that goes for any lender. I found then easy and I like going into the dealer with a check in my hand and you must practice saying no to everything extra they try to sell you. 
Registered User
Joined: May 2002
Posts: 77
Likes: 0
From: California
Remember to ask your dealer if they can beat the finance charge. If they can, call people first and they will most likely beat the dealers finance charge. Thats what I did. People - 5.9 Dealer - 5.5 People - 4.9 
Charter Member #49
Joined: May 2002
Posts: 447
Likes: 0
From: Austin, Texas
Originally posted by zzzyaaa
Remember to ask your dealer if they can beat the finance charge. If they can, call people first and they will most likely beat the dealers finance charge. Thats what I did. People - 5.9 Dealer - 5.5 People - 4.9
Remember to ask your dealer if they can beat the finance charge. If they can, call people first and they will most likely beat the dealers finance charge. Thats what I did. People - 5.9 Dealer - 5.5 People - 4.9
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