gatti-man

iTrader: (2)

I always thought yes but ive been told that it may not always be the case. Who is right me or them?

davidv

iTrader: (2)

Yes. Usually interest is charged on the remaining balance. If you have no remaining balance then you pay no interest charge.

Or are you taking about increasing your payments from the required $400/month to $500/month? The answer is the same.

gatti-man

iTrader: (2)

thats what i thought just checking

siznimper

Just make sure there is no penalty for early payment - there usually is not, but just make sure.

bixby

iTrader: (2)

They can't put a "Prepay penalty" on a car note. And you will always save money paying any dept with an interest rate tied to it.

arlingtonz

unless somehow you getting higher returns on your money elsewhere, if your note is 5% and you are somehow getting a return on cash of similiar value at 5.5%, then you would be losing out. it all depends on other returns, and how much you have on each note.

mavtais

iTrader: (12)

Don't forget to send it in two separate checks, one for the monthly premium, and one for the balance still owed. If you send only 1 check, the bank might roll over the amount paid on top to the next month, and not apply it to your balance.

Bob Bigelow

No one mentioned "Rule of 78". Google it. It's a sneaky way to ensure they (the loan sharks) get all your money, early pay or not. If you financed through the dealer chances are you've got a rule of 78 load and you're screwed. if you finananced through a bank or credit union, chances are good you've got a simple interest loan and you can save substantial by paying off early. Good luck.

jasonsfa98

One thing to keep in mind.

Take your interest rate on your car. Compare that to what the "extra" money you want to put towards the car payment could make you in investments. If you'd make less that you would lose on the extra payment then pay it off early.

Otherwise ...

Keep that extra cash and put it to work for you to offset the interest you pay on the car note.

bixby

iTrader: (2)

I thought "Rule of 78" was outlawed in California yrs ago. I thought it was actually shot down in all states? Man, it's been years since I've even heard it mentioned.

davidv

iTrader: (2)

I haven't heard of the Rule of 78 in 20 years. For some high risk loans (Household Finance for example) it may still apply. I can't say for certain that it does not.

yobri

iTrader: (2)

Had to look it up...

http://www.bankrate.com/brm/news/auto/20010827a.asp

hypeiv

iTrader: (2)

i make more on my investments than how much I pay for my loan... in order for me to pay off my car I would have to sell a lot of stocks and funds and put that money into my car... to me that sounds like investing in a car which does nothing but go down in value. I plan to get a new car in a year or two and never plan to pay off this car.

Depending on what interests rates are like in a year or two I may buy my next car outright but they would have to be pretty high for me to go that route.

RxZ

Nice find.

davidv

iTrader: (2)

Did you pay off the car?

bmxox

iTrader: (1)

I financed through the dealer and he specifically told me that if I paid it off early I would get out of whatever interest I would have had to pay.