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Is this auto refi situation correct?

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Anonymous
Not applicable

Is this auto refi situation correct?

My husband had an auto loan with a credit union (ACU) for a couple of years and his credit has improved a bunch so I suggested that he try to refinance to have the payment lowered so we could still pay the same amount but it would pay down more quickly saving interest. So he contacted his other credit union (Beacon) to get a refi quote and it sounded like a good rate so he got a 10 day payoff quote from ACU for $9,797 on friday 5/8 and brought it to Beacon and they did all their stuff and signed paperwork and what not. The ACU balance at the time of requesting the payoff quote was $9,694, which after doing some research I learned that payoffs are higher than balances so I accept that. Then I realized yesterday while checking the ACU account that the auto loan was still showing a balance on there which i thought was odd but maybe they hadnt updated their records yet. When I woke up this morning I see that ACU autodrafted the payment from the checking account to the loan account making the new balance $9,476. How are we still paying on a loan to a credit union that should have been paid off? Is this normal? I feel like we probably made a mistake if the new balance at Beacon is 9797...we didnt pick up where we left off like expected, we have a $321 higher balance than we would have if we kept it as is. Am I completely missing something? Neither of us have ever refinanced anything before Smiley Embarassed

Message 1 of 4
3 REPLIES 3
Anonymous
Not applicable

Re: Is this auto refi situation correct?

balance doesnt get paid off instantly its a process, but the reason the balance is higher is usually because of taxes or fees that CU charged you

 

Message 2 of 4
StartingOver10
Moderator Emerita

Re: Is this auto refi situation correct?

Remember that interest is paid in arrears too. So if you pay off a loan there is going to be interest charged from the date of your last payment to the payoff date.

 

As far as the auto payment from your account, did you stop the auto payments or did you expect the auto payment to automatically stop when the loan was paid off? They don't automatically stop. You have to actually stop the auto payments separately.

Message 3 of 4
Anonymous
Not applicable

Re: Is this auto refi situation correct?


@StartingOver10 wrote:

Remember that interest is paid in arrears too. So if you pay off a loan there is going to be interest charged from the date of your last payment to the payoff date.

 

As far as the auto payment from your account, did you stop the auto payments or did you expect the auto payment to automatically stop when the loan was paid off? They don't automatically stop. You have to actually stop the auto payments separately.


i wouldnt expect a month of interest to be $321 when the monthly payment was only $301.

 

no we didn't stop the auto payments, yes we expected them to automatically stop when it was paid off because we did not set up the auto draft. It was a condition on the loan that we are unable to modify. i expected there to be no balance...if there's no balance there's nothing to pay. we thought when he signed the papers it was a done deal. apparently that is not the case.

Message 4 of 4
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